Gross Rent Multiplier (GRM) - The Gross Rent Multiplier or GRM is a ratio that is used to estimate the value of commercial or income producing properties. The GRM provides a rough estimate of value only. Two pieces of financial information are required to calculate for a property, the sales price and the total of all rents or Gross Scheduled Income (GSI). The calculation is done by taking the Sales Price divided by the annual Gross Scheduled Income.
The Gross Rent Multiplier (GRM) is useful in providing a rough estimate of value. The capitalization rate (Cap Rate) is a more affective method of calculating the value of an income property, since average vacancy and operating expenses are included in the cap rate calculation.
