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Gross Rent Multiplier (GRM) Calculator
Gross rent multiplier (GRM) is a property's price divided by its annual gross rent. A $300,000 property renting for $30,000 a year has a GRM of 10. A lower GRM suggests a cheaper price relative to rent. It's a fast screening ratio that ignores expenses, so use it as a first filter, not a final answer.
GRM = Property Price ÷ Annual Gross Rent
How it works
GRM is one of the quickest ways to compare income properties. Divide the price by the annual gross rent (monthly rent × 12) to get a single number — the lower it is, the less you're paying per dollar of rent. Investors use it to quickly rank a list of properties before spending time on full analysis.
Its weakness is also its simplicity: GRM ignores operating expenses, vacancy, and financing, so two properties with the same GRM can have very different actual returns. Treat it as a screening tool, then move to cap rate and cash-on-cash for the properties that look promising.
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Get started freeFrequently asked questions
- How do you calculate gross rent multiplier?
- Divide the property's price by its annual gross rent. For a $300,000 property renting at $2,500 per month ($30,000 per year), the GRM is 10.
- What is a good GRM?
- It depends on the market, but lower is generally better because it means a lower price relative to rent. Typical GRMs often fall between roughly 4 and 12; compare a property to similar ones in the same area rather than to a fixed number.
- What's the difference between GRM and cap rate?
- GRM uses gross rent and ignores expenses, making it a quick screen. Cap rate uses net operating income (after expenses), so it's a more accurate measure of a property's return. Use GRM to filter, cap rate to analyze.