Each of the following statements about a gross rent multiplier is accurate EXCEPT.
Correct Answer
D) It directly adjusts for each property's operating expenses and vacancy history
This is the exception because GRM does not directly adjust for each property's operating expenses or vacancy history. GRM is a gross-rent shortcut, so it omits the detailed expense analysis that would be reflected more directly in an NOI and cap-rate method.
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Previous Question
In November 2026, trainee appraiser Miguel Santos has calculated potential gross income, effective gross income, and NOI for a small apartment building. To apply a direct capitalization rate, which figure should he generally capitalize?
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In December 2026, appraiser Hannah Reed extracts a consistent GRM of 100 from three recent comparable rental sales. If the subject property's monthly market rent is $3,400, what value is indicated by the income approach?