Gross Rent Multiplier (GRM) Calculator

How to use this calculator

1. Enter the property value or purchase price.
2. Enter annual gross rent (before vacancy/expenses).
3. See GRM and the implied monthly gross rent for a quick yield check.

Inputs explained

Property value

Market value or contract price for the property.

Gross rent (annual)

Total scheduled rent for the year before vacancy and expenses.

When to use it

• Sorting multiple listings quickly by price-to-rent ratio.
• Comparing different markets or asset types at a glance.
• Flagging deals that need deeper analysis on expenses and vacancy.

Tips & cautions

• Use GRM only as a screening metric—follow up with NOI, cap rate, and DSCR for real underwriting.
• Keep rents annual to avoid unit mix-ups; multiply monthly rent by 12 first if needed.
• Compare GRM to local norms; acceptable ranges vary by market and property class.
• Ignores vacancy, operating expenses, CapEx, and financing—use NOI and cap rate to factor those in.
• Not a replacement for DSCR or cash-on-cash when leverage matters.
• Sensitive to overstated scheduled rents—verify with actuals and market comps.

Worked examples

Deep dive

FAQs

Does GRM include expenses or vacancy?

No. GRM uses gross rent only. Check NOI and cap rate to incorporate expenses and vacancy.

What is a good GRM?

Ranges vary by market and asset class. Compare to local comps—lower GRM usually signals more income per dollar of value.

Can I input monthly rent?

Convert monthly to annual (multiply by 12) first. This calculator expects annual gross rent.

GRM vs cap rate?

GRM ignores expenses; cap rate uses NOI to reflect operating costs. Use both, plus DSCR for financing impact.

Does GRM include other income?

Yes—include recurring income like parking or pet fees in gross rent, but keep it realistic to avoid understating GRM.

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