Real Estate Investing Calculators
Gross rent multiplier.
The gross rent multiplier (GRM) is a property’s price divided by its annual gross rent, the number of years of gross rent it takes to equal the price. Enter the price and monthly rent below for the GRM, or add a comparable GRM to estimate a value. Runs in your browser; nothing is sent or stored.
Your numbers
Result
Fill the form and press Calculate.
Not financial advice. This is an estimating tool built on the numbers you enter. Real estate returns depend on assumptions that can be wrong; check them with a lender, an accountant and local sources before you buy.
Worked example
A $300,000 property renting for $2,000 a month has annual gross rent of $24,000.00, so GRM = $300,000 / $24,000.00 = 12.50. Monthly rent is 0.667% of the price. If comparable properties trade at a GRM of 12, this one is worth about $288,000.00, so the price is $12,000.00 above that.
How it works
GRM = price / annual gross rental income. Annual gross rent = (monthly rent + other monthly income) x 12. Estimated value = annual gross rent x comparable GRM. Gross yield = annual gross rent / price, which is 1 / GRM. GRM ignores vacancy, expenses and financing, so use it only to compare similar properties in the same area.
Sources and basis
Corporate Finance Institute gives the formula as property price divided by annual gross rental income and notes that GRM does not consider vacancy rates. Wikipedia describes it as the number of years of gross rent required to recover the purchase price, where a lower GRM indicates a relatively more attractive opportunity.
- Gross Rent Multiplier (GRM) - Overview, Formula, Examples (Corporate Finance Institute), opened 2026-10-08.
- Gross rent multiplier (Wikipedia), opened 2026-10-08.
FAQ
How do you calculate gross rent multiplier?
Divide the price by annual gross rent. $300,000 / $24,000.00 = 12.50.
Is a higher or lower GRM better?
All else equal, a lower GRM means the price is lower relative to the rent. Compare it only with similar properties in the same market.
What is the difference between GRM and cap rate?
GRM uses gross rent and ignores expenses. Cap rate uses net operating income, so it reflects operating costs. GRM is a quick screen; cap rate is closer to the real return.
How do you estimate value with a GRM?
Multiply annual gross rent by the GRM of comparable properties. At a GRM of 12 the example is worth $288,000.00.
Does GRM include vacancy?
No. GRM uses gross rent before vacancy and expenses, which is why it can flatter a property with high costs.