The gross rent multiplier (GRM) is a fast valuation screen: property price divided by annual gross rent. Lower is usually better. Enter price and monthly rent.
GRM = property price ÷ annual gross rent. It ignores expenses, vacancy and financing, so use it only as a first screen — then run the yield and cash flow calculators.
GRM divides the purchase price by the annual gross rent. A property priced at 250,000 renting for 1,500/month (18,000/year) has a GRM of about 13.9. A lower GRM means the price is lower relative to rent, which can signal better value — but because GRM ignores operating costs, always confirm with net yield and cash flow.
It varies by market, but many investors look for a GRM between 4 and 12. Lower GRMs mean the price is cheaper relative to rent; high-growth cities often run higher.
GRM uses gross rent only, while cap rate uses net operating income after expenses. Cap rate is more accurate; GRM is faster for screening many listings.
No. GRM is based on gross rent alone. To factor in running costs, use the rental yield (cap rate) and cash flow calculators.
Use GRM to shortlist, then track real rent, costs and yield per property in RentFlow. Free to start.
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