Gross Rent Multiplier (GRM) Calculator

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Choose whether you know the monthly or annual gross rental income.
The purchase price or current market value of the property.
Total gross monthly rental income before any expenses or vacancies.
The benchmark GRM for comparable properties in your market. Used to back-calculate what the property should be worth at that multiple.
Enable to enter a second property and compare GRM values side by side.
Currency
Gross Rent MultiplierHigh GRM - proceed with caution
12.5

Property price divided by annual gross rent

Annual gross rent$36,000
Breakeven (gross)12.5years
Fair value at target GRM$288,000
Price vs fair value$162,000
12.5 x
Strong<5Solid5-8Fair8-12High12+
Fair value at target GRM$288,000
Annual gross rent$36,000

GRM of 12.50 - elevated GRM warrants careful expense and vacancy analysis.

  • At a GRM of 12.50, gross rent would cover the full purchase price in roughly 12.5 years - before accounting for vacancies, operating expenses or financing costs.
  • Compared to the target GRM of 8, the property appears overpriced by roughly 56.3%. At that benchmark a buyer would expect to pay around the fair-value estimate instead.
  • GRM is a screening tool only. Always follow up with a cap rate, net operating income, and cash-on-cash return analysis before committing.

Next stepTo sharpen the analysis, gather operating expenses (taxes, insurance, maintenance, management) and calculate the cap rate and debt service coverage ratio.

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