Gross rent multiplier calculator
By Jude Wallis
Gross rent multiplier is property price divided by annual gross rent. A $360,000 property with $36,000 of annual gross rent has a GRM of 10.
Gross rent multiplier
10.00
$360,000.00 of price on $36,000.00 of scheduled rent.
- Price
- $360,000.00
- Annual rent
- $36,000.00
- GRM
- 10.00
Asking price or purchase price.
Scheduled rent for a year, before vacancy.
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Implied cap valueThe formula
Divide property price by annual gross rent. GRM is a multiple, not a percentage.
Price divided by gross rent
$360,000 divided by $36,000 is 10. How gross rent multiplier works explains what that multiple compares.
Higher rent lowers the multiple
Keep price at $360,000 and raise annual rent to $45,000. The gross rent multiplier falls to 8.
Gross means before expenses
GRM uses gross rent, so operating costs are not subtracted in the denominator. Cap rate uses a net operating income measure instead.
Scope of GRM
This is a screening multiple from price and gross annual rent. Financing, vacancy and operating expenses require separate calculations. This is educational material, not financial advice.
Worked examples
\$360,000 price and \$36,000 rent
Property price is $360,000 and annual gross rent is $36,000. What is GRM?
- Divide price by annual rent: .
- The gross rent multiplier is 10.
A $360,000 price divided by $36,000 of annual rent gives a GRM of 10.
\$360,000 price and \$45,000 rent
Property price is $360,000 and annual gross rent is $45,000. What is GRM?
- Divide price by annual rent: .
- The gross rent multiplier is 8.
A $360,000 price divided by $45,000 of annual rent gives a GRM of 8.
Using monthly rent in the denominator
The denominator is annual gross rent. A monthly figure must first match the annual period used by the identity.
Common questions
Is GRM a percentage?
No. It is a price to annual rent multiple.
Does GRM subtract expenses?
No. It uses gross annual rent.
Is this financial advice?
No. It is educational material for a screening multiple.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.