Gross Rent Multiplier (GRM)

Purchase price divided by annual gross rent. A fast back-of-envelope screen.

GRM is a quick comparison metric — useful for triaging a list of listings before underwriting in detail.

Formula: GRM = Price ÷ Annual Gross Rent.

Reading the number

Under 8: cash-flow market; deals likely pencil.
8–12: balanced; underwrite carefully.
Over 12: appreciation market; cash flow unlikely without 30%+ down.

GRM ignores expenses, taxes, and financing. Two properties with the same GRM can have very different cap rates depending on property tax and management cost.

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