Gross Rent Multiplier (GRM) Calculator (price ÷ gross rent, value from market GRM)

Understanding the gross rent multiplier calculator — concept and principle

This calculator finds the gross rent multiplier (GRM) of a rental property, the ratio of its price to its gross annual rent, along with gross scheduled income, the gross yield and the monthly rent multiplier. With a typical GRM for the area, it also estimates a value and shows how far the asking price is above or below it. Use it to screen rental properties quickly before a full analysis.

The price is 10 years of gross rent; at the area's 9.5 the same rent supports $570,000.

How it is calculated

Gross scheduled income = (monthly rent + other monthly income) × 12, with all units let.
GRM = price ÷ gross annual income.
Gross yield = 1 ÷ GRM.
Monthly rent multiplier = price ÷ monthly income = 12 × GRM.
Value at the market GRM = market GRM × gross annual income; difference = price − that value.

The principle

The GRM is one of the simplest tools of the income approach to valuation: buyers pay a certain number of years of gross rent for similar properties. If nearby buildings sell at about 9.5 times gross rent, a building with the same rent should be worth about the same multiple. A lower GRM means more rent for each unit of price. But GRM ignores vacancies, operating costs and financing, so two buildings with the same GRM can have very different net income.

Worked example

Default inputs: price $600,000, rent $5,000 a month, no other income, market GRM 9.5.

Gross scheduled income = 5,000 × 12 = $60,000.
GRM = 600,000 ÷ 60,000 = 10; gross yield = 10%.
Monthly rent multiplier = 600,000 ÷ 5,000 = 120.
Value at the market GRM = 9.5 × 60,000 = $570,000.
Asking price is $30,000 above that value.

Each point is the calculator re-run with only “Monthly rent (all units, fully let)” changed; the gold point is the default example. Change the inputs above and this chart follows your numbers.

Monthly rent (all units, fully let)	Gross rent multiplier (GRM)
1,250	40
2,500	20
3,750	13.33
5,000	10
6,250	8
7,500	6.67
10,000	5

How to read the result

A GRM above the market's typical figure suggests the price is high relative to rent, or that the property has advantages not captured by rent. Use GRM to shortlist; then check net operating income, the cap rate and cash flow, which include costs.

Common mistakes

Using actual collected rent for one property and scheduled rent for another.
Comparing GRMs from different property types or areas.
Treating GRM as a measure of profit.
Mixing monthly and annual multipliers.

Keep in mind: GRM is a screening ratio only. Property values depend on costs, condition, location and financing; get a proper appraisal before buying. This is not financial advice.

Frequently asked questions

What is a good gross rent multiplier?

It depends on the local market; compare with recent sales of similar properties nearby.

Is a lower GRM better?

Usually for buyers, since it means more rent per unit of price, but check costs and condition.

How is GRM different from the cap rate?

GRM uses gross rent; the cap rate uses net operating income after expenses.

Sources: Income approach to valuation: GRM = price ÷ gross annual rent; value = GRM × gross income (standard appraisal formulas)

Checked 9 Nov 2026. Gross rent multiplier = sale price ÷ gross annual (or monthly) rent and value = GRM × gross income, as used in the income approach to property valuation: standard appraisal formulas.

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