GRM calculator
Gross rent multiplier in one step — price ÷ annual gross rent, zero deductions. A fast first screen, not a substitute for cap rate. For the full picture, use the full deal analyzer.
Gross rent multiplier
- Gross annual rent
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- Legacy monthly GRM
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A screening ratio, market-dependent — lower is generally cheaper per dollar of rent. Not investment advice.
How GRM is calculated
Gross rent multiplier divides a property's purchase price by its gross scheduled annual rent — the full rent roll before any deductions for vacancy, operating expenses, taxes, insurance, or debt service. If you only know monthly rent, multiply by 12 first; this calculator uses the modern annual convention throughout. A $300,000 property renting for $2,500/month has $30,000 of annual gross rent, for a GRM of 10 — you're paying 10 times the property's annual rent roll.
A legacy monthly GRM convention also exists in some older residential materials — price divided by monthly rent, producing a number roughly 12× larger (a "GRM of 100" in monthly terms equals about 8.3 in annual terms). This calculator reports both so a number you've seen quoted elsewhere doesn't look like a mismatch.
What GRM is — and isn't — good for
GRM's entire appeal is speed: two numbers, no expense data needed, useful for triaging a long list of listings before you've pulled tax records or a rent roll. Lower is generally better, and typical residential GRMs often land somewhere around 4 to 8 depending on the market — but because it ignores operating expenses, vacancy, and financing entirely, two properties with identical GRM can have very different real returns once expenses are counted.
Don't confuse GRM with the gross income multiplier (GIM), which uses effective gross income instead of gross scheduled rent — mixing the two produces inconsistent comparisons. Once GRM has done its job narrowing a list, move to cap rate, NOI, and cash-on-cash return for the real underwriting.
GRM calculator FAQ
Common questions about the gross rent multiplier, answered from the same tested formula module used above.
What is the gross rent multiplier (GRM)?
GRM = purchase price ÷ gross annual rent, using the modern annual convention. It's a fast comparison ratio: a lower GRM means you're paying less per dollar of rent. Because it ignores operating expenses, vacancy, and financing entirely, GRM is a quick screen, not a substitute for cap rate or cash flow.
How do you calculate GRM?
Divide the property's purchase price by its gross scheduled annual rent — the full rent roll before any deductions for vacancy, expenses, taxes, or debt service. If you only know monthly rent, multiply it by 12 first; never divide price by a monthly figure, which produces a very different (legacy "monthly GRM") number.
What is a good GRM?
Lower is generally better, and typical residential GRMs often land somewhere around 4 to 8 depending on the market — but because GRM ignores expenses and financing entirely, it's only a first-pass filter. Confirm any GRM-based hunch with the cap rate, cash flow, and cash-on-cash return before drawing conclusions.
What's the difference between GRM and cap rate?
GRM uses gross rent with zero deductions, so two properties with identical rent and price always show the same GRM even if one has much higher expenses. Cap rate uses NOI — rent after vacancy and operating expenses — so it reflects the real economics of a deal. GRM is a fast first screen; cap rate is the more complete unleveraged yield.
Is GRM the same as the gross income multiplier (GIM)?
No, though they're often confused. GRM strictly uses gross scheduled rent with zero deductions. GIM uses effective gross income — rent after a vacancy adjustment, sometimes including other income. Mixing the two produces inconsistent comparisons across listings, so keep the income basis exactly gross when computing GRM.