Gross Rent Multiplier
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The Gross Rent Multiplier (GRM) is a ratio between the purchase price and the annual property rent.
Gross Rent Multiplier = Purchase Price / Annual Gross Rents
The GRM is used to help investors determine if a property is a good investment or not.
The lower the GRM, the better. Generally, a GRM of 7 or less is good.
GRM also represents the number of years to pay for an investment without financing.
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