Gross Rent Multiplier (GRM) Calculator
Use our free GRM calculator to quickly estimate a property's Gross Rent Multiplier or to convert expected gross annual rent into an approximate market value. Perfect for real estate investors, agents, and analysts doing quick screening of rental properties.
Gross Rent Multiplier Formula
GRM is a simple screening metric that compares price to gross income (before expenses). It's fast for initial property comparison but does not include operating costs, vacancies, financing, or capital expenditures.
How this GRM calculator works
This tool either divides a property's price by its gross annual rent to produce a GRM or multiplies gross annual rent by a target GRM to estimate value. Use it for quick filtering of deals—properties with lower GRMs generally indicate higher gross yield, but you must follow up with NOI, cap rate, and cashflow analysis for investment decisions.
When to use this GRM calculator
Initial screening of multiple rental properties quickly
Comparing similar property types or neighborhoods at a glance
Back-of-envelope valuation in acquisition memos
Converting market GRM into a target price when you know expected rent
Teaching or training new analysts on simple valuation concepts
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Typical GRM Ranges by Property Type (Guideline)
GRM norms vary by market, property type, and growth expectations. Use these as broad starting points—local supply/demand and expenses shift practical values.
Single-family residential (stable markets)
Small multifamily (2–10 units)
Larger multifamily / apartments
Commercial (retail/office)
High-growth or low-expense markets
These ranges are screening-level benchmarks. Always perform NOI/cap-rate analysis, check vacancy and expense assumptions, and localize benchmarks before making offers.
Frequently Asked Questions
GRM measures how many years of gross rent are required to pay the purchase price. It's a quick yield proxy but excludes expenses and vacancies.
Generally, a lower GRM suggests a higher gross-income yield (potentially better), but it doesn't account for costs—always check net operating income (NOI) and cap rate.
GRM uses gross rent (before expenses); cap rate uses NOI (after expenses). Cap rate gives a fuller picture of return.
Yes — convert to annual first (monthly rent × 12) before applying the formula.
No—GRM is pre-expense. Use cap rate or cashflow models for expense-adjusted valuation.
Targets depend on market, property type, and strategy. Use local benchmark ranges and then confirm with NOI and cash-on-cash targets.
It can, but short-term rental gross income is more volatile—adjust for realistic occupancy and platform fees before using GRM.
There's no direct conversion because GRM ignores expenses; a rough approach: if you estimate an expense ratio (expenses ÷ gross rent), you can derive expected NOI and then compute cap rate = NOI ÷ Price. Always prefer direct NOI inputs for cap-rate calculations.