Gross Rent Multiplier
GRM (annual and monthly), the gross rent yield.
Example
You enter
- Purchase price / value ($) 300000
- Gross rental income ($) 36000
- Rent basis annual
You get
- Grm annual 8.333
- Gross yield (%) 12
Checked against published worked examples from: Appraisal Institute income-approach (GRM).
Details, formula, and sources
ScopeGRM (annual and monthly), the gross rent yield, and an implied value from a market GRM - an income-approach screening metric.
Formula or tableGRM_annual = price / gross_annual_rent; GRM_monthly = price / gross_monthly_rent; implied_value = market_GRM * gross_rent on the selected basis (an annual GRM times annual rent, a monthly GRM times monthly rent); gross_yield% = 1/GRM_annual * 100.
Source and editionStandard income-approach screening metric per the Appraisal Institute's The Appraisal of Real Estate income approach, by name; USPAP governs the appraiser's value opinion.
Free accessDistinct from cap-rate-dscr, which uses NOI, not gross rent. Screening only.
What governsEstimate. AHJ and licensed professional govern.
API field namesprice, gross_rent, rent_basis, grm_annual, gross_yield_pct
- Gross rent must be market rent for comparabilityAppraisal Institute