| skr., nier. |
gross rent multiplier (Gross Rent Multiplier or "GRM" is the ratio of the price of a real estate investment to its annual rental income before expenses: Gross Rent Multiplier (GRM) = Sale Price / Potential Gross Income The GRM is useful for comparing and selecting investment properties where operating costs can be expected to be uniform across properties. In other words, the more homogeneity of the sales and subject, in terms of age, quality of construction, style, condition, etc., the higher potential there is for accuracy. Historically, the GRM was used primarily for 2-4 unit properties. In this case, a property value may be estimated using the following related formula: Sale Price = Gross Rent Multiplier x Potential Gross Income. WK Alexander Demidov) |
