An investor is valuing a small rental property listed at $540,000 that produces gross monthly rent of $2,650. What is the gross rent multiplier (GRM)?
Correct Answer
C) 203.77
The gross rent multiplier (GRM) using monthly rent is price divided by gross monthly rent: $540,000 ÷ $2,650 ≈ 203.77. This is the value that matches the formula.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Net Operating Income (NOI) is the revenue a property generates after deducting all operating expenses.
Converting a percentage to a decimal involves dividing the percentage value by 100.
In real estate, property value can be estimated by dividing the Net Operating Income (NOI) by the Capitalization Rate (Cap Rate).
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