GRM (Gross Rent Multiplier)
Property price ÷ annual gross rent. The simplest screening ratio in real estate — no expense data required.
6–10 is healthy in cash-flow markets. 10–14 is balanced. 14–20 is appreciation territory. 20+ is luxury / ultra-coastal.
Metrics
How it's calculated
GRM = Property Price ÷ Annual Gross Rent
Example
A $300,000 property renting for $2,500/mo ($30,000/yr) has a GRM of $300,000 ÷ $30,000 = 10.0.
Run the numbers with the Gross Rent Multiplier (GRM) Calculator.
Why GRM (Gross Rent Multiplier) matters
GRM is the fastest triage filter there is — you can compute it from a listing price and a rent estimate alone, with zero expense data. Lower is better. Use it to shrink a 200-listing search down to the 20 worth underwriting properly.
Related terms
- Cap Rate
- Net Operating Income ÷ property value. The unleveraged return a property generates, independent of f…
- 1% Rule
- Rule of thumb: monthly rent should equal at least 1% of purchase price. A 5-second screening filter,…
- NOI (Net Operating Income)
- Gross annual rent minus all operating expenses, before debt service and income tax.
Where GRM (Gross Rent Multiplier) shows up in TrueCap
The analyzer computes this metric on every run from the assumptions you see and can edit, and shows it in the results view.