Gross Rent Multiplier (GRM) Calculator

A fast screen, not a valuation

Gross rent multiplier is price divided by gross annual rental income. It is useful for one thing: sorting a list of similar properties quickly before you do real work on any of them.

Worked example

$12,500,000 ÷ $1,200,000 gross income = 10.42×.

Its central weakness

GRM uses gross income and ignores operating expenses completely. Two buildings at an identical 10× GRM can have wildly different net income: one triple-net with the tenant paying everything, the other full-service with the landlord absorbing taxes, insurance, maintenance and management.

The first is a far better asset at the same GRM. Nothing in the multiplier tells you which is which.

Use it to shortlist, then switch

Once a property is worth real attention, move to NOI and cap rate, which account for the expense structure. GRM is a screening tool, and comparisons only mean anything within the same asset class, submarket and lease structure.