Gross rent multiplier
By Jude Wallis
Gross rent multiplier, or GRM, is purchase price divided by annual scheduled rent. It is a rent multiple, not a profit rate.
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A lower GRM means more scheduled rent per dollar of price. It does not mean higher net operating income, and it does not mean positive cash flow after the loan.
Cap rate divides NOI by price. How gross rent multiplier works is the explainer. The gross rent multiplier calculator is the quotient.