GRM & GIM — Quick-and-Dirty Multipliers

Multipliers shortcut the income approach for small properties. The Gross RENT Multiplier (GRM) uses MONTHLY rent: GRM = sale price ÷ monthly gross rent, so a $240,000 house renting for $1,600 has a GRM of 150; apply a neighborhood GRM to a subject's rent to estimate value. The Gross INCOME Multiplier (GIM) uses ANNUAL income for larger or commercial properties. Multipliers use GROSS figures — no expenses subtracted — which is both their speed and their weakness: two buildings with equal rents but different expense loads look identical to a GRM.