A California appraiser extracts a GRM from a comparable sale. A triplex in Anaheim sold for $975,000. The property was renting for a total of $4,875 per month at the time of sale. What is the Gross Rent Multiplier based on monthly rent?
Correct Answer
A) 200
Step 1: Monthly GRM = Sale Price / Monthly Gross Rent = $975,000 / $4,875 = 200.
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A California real estate agent explains to an investor that the Gross Rent Multiplier (GRM) is a simplified method of property valuation. Compared to the capitalization rate method, what is the main limitation of the GRM approach in the California market?
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When calculating Net Operating Income (NOI) for the income approach in California, all of the following are deducted as operating expenses EXCEPT: