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Gross Rent Multiplier Calculator
A fast first-pass filter for comparing rental listings before you dig into expenses and financing.
Gross rent multiplier at common prices and rents
GRM is the property price divided by gross annual rent, before any expenses. It is the quickest screen for whether a rental is worth a closer look.
| Property price | Gross annual rent | Monthly rent | GRM |
|---|---|---|---|
| $200,000 | $24,000 | $2,000 | 8.33x |
| $250,000 | $24,000 | $2,000 | 10.42x |
| $300,000 | $24,000 | $2,000 | 12.50x |
| $300,000 | $30,000 | $2,500 | 10.00x |
| $400,000 | $30,000 | $2,500 | 13.33x |
| $400,000 | $36,000 | $3,000 | 11.11x |
| $500,000 | $36,000 | $3,000 | 13.89x |
| $600,000 | $42,000 | $3,500 | 14.29x |
A lower multiple means more rent per dollar of price. GRM's whole value is speed - it needs only two numbers you can get from a listing, so it is a screening tool for shortlisting, not an analysis. Because it uses gross rent it is blind to expenses, so a building with high taxes, old systems or heavy vacancy looks identical to a well-run one at the same price and rent. Once a property passes this screen, move to cap rate, which uses income after operating costs. Typical ranges vary widely by market, so compare against local comparable sales rather than any national rule of thumb.
GRM is a screening tool, not a final answer
GRM ignores vacancy, operating expenses, taxes, and financing entirely — it's meant to quickly rule properties in or out for closer analysis, not to replace a full cap rate or cash-flow projection.
Lower usually means better value
A lower GRM means the price is smaller relative to the rent it generates — all else equal, that's a more attractive deal, though it can also signal a higher-risk area or property condition issue worth investigating.
GRM vs. cap rate
GRM uses gross rent (before expenses), cap rate uses net operating income (after expenses). GRM is faster to calculate since you don't need expense data, making it ideal for initial screening on listing sites. Cap rate is more accurate for final decisions because two properties with identical GRMs can have very different expense ratios.
Frequently asked questions
What is a good gross rent multiplier?
Generally 4–7 is considered good for residential rentals, but this varies enormously by market. High-cost cities like San Francisco may see GRMs of 15–25, while Midwest markets run 5–10. Compare GRM to local comps, not to a national benchmark.
How do you calculate GRM?
GRM = Property Price ÷ Gross Annual Rent. For a $200,000 property generating $2,000/month rent ($24,000/year): GRM = 200,000 ÷ 24,000 = 8.33. Lower means you're paying fewer years of rent to own the property.
Why doesn't GRM account for expenses?
That's by design — GRM is a quick screening metric, not a profitability measure. Expenses (insurance, taxes, maintenance, vacancy) vary per property and require detailed analysis. GRM lets you compare 50 listings in minutes before spending hours analyzing the top 5 with full cash-flow projections.
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Last updated: September 6, 2026