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Gross Rent Multiplier Calculator
Quickly screen rental properties with the gross rent multiplier. Get the GRM from the price and gross rent, estimate a property's value from the GRM of comparable sales, or find the rent a property needs to hit your target GRM.
Last updated:
Calculate
$
From recent sales of similar rentals nearby.
$
All units, before vacancy and expenses.
Enter your values to see the result.
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How to use the Gross Rent Multiplier Calculator
- Choose what to calculate: the GRM, a value estimate, or the rent needed.
- Enter the property price or the GRM of comparable properties.
- Enter the gross rent of all units and whether it is monthly or yearly.
- Press Calculate to see the result, the gross yield and a table at nearby GRMs.
GRM formulas
- GRM = property price ÷ gross annual rent
- Property value = GRM × gross annual rent
- Rent needed = property price ÷ target GRM
- Monthly GRM = property price ÷ gross monthly rent = GRM × 12
- Gross rent yield = gross annual rent ÷ price = 1 ÷ GRM
Example: a fourplex priced at $600,000 with $5,000 of monthly rent earns $60,000 a year, so its GRM is 600,000 ÷ 60,000 = 10 and its gross yield is 10%.
GRM and gross yield
| GRM | Monthly GRM | Gross yield | Monthly rent per $100,000 of price |
|---|---|---|---|
| 6 | 72 | 16.67% | $1,389 |
| 8 | 96 | 12.50% | $1,042 |
| 10 | 120 | 10.00% | $833 |
| 12 | 144 | 8.33% | $694 |
| 15 | 180 | 6.67% | $556 |
| 20 | 240 | 5.00% | $417 |
GRM ignores vacancy, taxes, insurance and repairs. Two buildings with the same GRM can have very different profits, so follow up with an NOI and cap rate analysis.
Frequently asked questions
What is the gross rent multiplier formula?
GRM = property price ÷ gross annual rent. A $600,000 building that rents for $60,000 a year has a GRM of 10, meaning the price equals ten years of gross rent.
How do I estimate a property's value with GRM?
Find the GRM of similar rental properties that sold recently (their price ÷ their gross rent), then multiply it by the subject property's gross annual rent. Value = GRM × gross annual rent.
What is a good gross rent multiplier?
Lower is generally better for a buyer because you pay less per dollar of rent. What counts as normal varies a lot by city and property type, so compare against recent local sales rather than a universal number.
What is the difference between GRM and cap rate?
GRM uses gross rent and ignores vacancy and operating expenses. The cap rate uses net operating income (rent minus vacancy and expenses) divided by price, so it gives a more complete picture. GRM is best for a quick first screen.
What is a monthly GRM?
Some investors divide the price by monthly rent instead of annual rent. The monthly GRM is simply 12 times the annual GRM, so a GRM of 10 equals a monthly GRM of 120. Make sure comparisons use the same convention.
What does gross rent include?
All scheduled rent from every unit for the year, often plus other regular income such as parking or laundry, before vacancy, credit losses and any expenses.
Are all the tools on FreeToolCabin tested for quality and accuracy?
Yes! Every tool on our site undergoes automated Q/A testing in real browser environments to ensure high precision, correct output, and zero errors. If you happen to spot a bug or have a suggestion, please contact us at [email protected] and our team will review it right away.
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