Credit portal




How To Calculate and Use the Gross Rent Multiplier (GRM)

how to calculate gross monthly income

By James Kimmons. Real Estate Business Expert

Jim Kimmons has many years of experience as a real estate agent and broker in three states, and serves as a consultant to other real estate professionals on using technology to improve their marketing and office management.

Continue Reading Below

Real estate investors who are actively seeking properties often have several, or even dozens on their radar.  They need to find a way to quickly rank the opportunities so that they can spend their time in deeper analysis on the best opportunities first.  Using the Gross Rent Multiplier allows them to get into deeper research on the best properties under consideration. maybe.

Difficulty: Easy

Time Required: 5 Minutes

Here's How:

  1. Getting the GRM for recent sold properties:

Market Value / Annual Gross Income = Gross Rent Multiplier (GRM)

Property sold for $750,000 / $110,000 Annual Income = GRM of 6.82

  • Estimating value of property based on GRM:

    Let's say that you did an analysis of recent comparable sold properties and found that, like the one above, their GRM's averaged around 6.75. Now you want to approximate the value of the property being considered for purchase. You know that its

    gross rental income is $68,000 annually.

    If it's listed for sale at $695,000, you might not want to waste more time in looking at it for purchase.

    Continue Reading Below

    More About Real Estate Mortgages

    What Types of Mortgages  are Used by Real Estate  Investors?

    Mortgage  types used by real estate  investors are usually the same as used by any purchaser of real estate. However, there are some more creative mortgage  .

    When and How to Use a Blanket Real Estate Mortgage

    In certain situations, blanket real estate mortgages  can be a viable financing tool. When the right conditions are present, and the buyers and sellers all .

    Real Estate Mortgage  Advice - Home Buying and Selling -

    Locating the best loan for you involves comparing loans such as conventional, jumbo, FHA / VA, weighingmortgage  benefits among fixed-rate, adjustable-rate,  .

    Why a Buyer Might Use a Blanket Real Estate Mortgage

    Once a real estate  buyer understands the disadvantages of a blanket real estate  mortgage. there are a number of reasons why it may still be an excellent choice .

    Interest Only Investor Mortgage  Loans - Real Estate  Business

    Interest only investor mortgage  loans allow a real estate  investor to defer principal payments. This could be to avoid early negative cash flow, to flip the property, .

    Category: Bank

    Similar articles:

  • Categories