# What is the gross rent multiplier?

Works out a rental property’s gross rent multiplier (price ÷ gross rent) on yearly or monthly rent, or the value or rent that a multiplier gives.

- Page: https://www.acalculator.org/finance/gross-rent-multiplier-calculator
- JSON spec: https://www.acalculator.org/finance/gross-rent-multiplier-calculator.json
- Version: ff4119e8bee9

## Default answer

Example with the default inputs (What do you want to find? GRM, Rent is Per year, Price or value $300,000.00, Gross rent $30,000.00): A price of $300,000.00 and gross rent of $30,000.00 give a gross rent multiplier of 10.

## Inputs

| Key | Label | Description |
| --- | --- | --- |
| find | What do you want to find? | The multiplier from a price and rent, the value from a rent and multiplier, or the rent. |
| per | Rent is | Whether the rent (and the multiplier) is for a year or for a month. |
| price | Price or value | The sale price or market value of the property. |
| rent | Gross rent | All the rent the property earns before expenses and vacancy, for a year or a month as chosen. |
| grm | Gross rent multiplier | The multiplier, on the same basis as the rent: about 5 to 15 on yearly rent, 60 to 180 on monthly. |

## Outputs

| Key | Label | Description |
| --- | --- | --- |
| grm | Gross rent multiplier | Price ÷ gross rent, on the chosen basis. |
| price | Value | Gross rent × gross rent multiplier. |
| rent | Gross rent | Price ÷ gross rent multiplier, on the chosen basis. |
| other | On the other basis | The multiplier on monthly rent (× 12) when the rent is yearly, or on yearly rent (÷ 12) when monthly. |

## Method

Gross rent multiplier = price ÷ gross rent. Value = gross rent × gross rent multiplier. Rent = price ÷ gross rent multiplier. A multiplier on monthly rent = 12 × the multiplier on yearly rent.

## Assumptions

- Gross rent is all the rent before vacancy and expenses, for a year or a month as chosen; the multiplier is on the same basis.
- A gross rent multiplier from comparable sales is applied on the same basis it was found on.
- Arithmetic is exact on the typed decimals; money shows to the cent and multipliers to 2 decimals, halves rounded up.

## Worked examples

1. find = grm, per = month, price = $60,000.00, rent = $525.00 gives grm = 114.285714, other = 9.52381. Source: Indiana Department of Local Government Finance, IN.gov FAQ on rental property (GRM = sale price ÷ monthly gross income; market value = monthly market rent × GRM; $60,000 ÷ $525 = 114; $600 × 114 = $68,400), https://faqs.in.gov/hc/en-us/articles/115005067007-I-own-a-rental-property-To-stay-competitive-I-cannot-raise-the-rent-What-can-I-do-to-help-offset-the-increases-in-property-taxes: $60,000 ÷ $525 = 114 (rounded there).
2. find = value, per = month, rent = $600.00, grm = 114 gives price = $68,400.00, other = 9.5. Source: Indiana Department of Local Government Finance, IN.gov FAQ on rental property (GRM = sale price ÷ monthly gross income; market value = monthly market rent × GRM; $60,000 ÷ $525 = 114; $600 × 114 = $68,400), https://faqs.in.gov/hc/en-us/articles/115005067007-I-own-a-rental-property-To-stay-competitive-I-cannot-raise-the-rent-What-can-I-do-to-help-offset-the-increases-in-property-taxes: $600 × 114 = $68,400.
3. find = grm, per = year, price = $850,000.00, rent = $126,000.00 gives grm = 6.746032, other = 80.952381. Source: California State Board of Equalization, Appraisal Training, Lesson 9, Multipliers: Derivation and Valuation (sale price ÷ annual gross income; $850,000 ÷ $126,000 = 6.75), https://www.boe.ca.gov/info/iav/lesson9.htm: $850,000 ÷ $126,000 = 6.75 (rounded there).
4. find = rent, per = year, price = $300,000.00, grm = 8 gives rent = $37,500.00, other = 96.

## FAQ

### What is the gross rent multiplier?

The gross rent multiplier (GRM) is a property’s price divided by its gross rent: how many years (or months) of rent the price equals, before any expenses. Comparing GRMs of similar rentals that sold shows which price looks high or low for the rent.

### How do I calculate the gross rent multiplier?

Divide the sale price by the gross rent. A $300,000 house that rents for $30,000 a year has a GRM of 10. On monthly rent ($2,500) the same house has a GRM of 120.

### Monthly or yearly rent?

Both are used. Indiana’s assessors use monthly rent: a $60,000 sale renting for $525 a month has a GRM of 114. California’s assessors usually work with yearly income, and many investors use yearly rent. Always compare multipliers on the same basis: the monthly GRM is 12 times the yearly one.

### How do I use a GRM to estimate value?

Find the GRM of similar rentals that sold, then multiply the property’s gross rent by it. With a monthly GRM of 114, a home that would rent for $600 a month is worth about 600 × 114 = $68,400.

### What is a good gross rent multiplier?

There is no single good value: it depends on the market and the property. A lower GRM means more rent for each dollar of price, but the GRM ignores vacancy, taxes, insurance and repairs, so check the cap rate as well before you buy.

### What is the difference between GRM and cap rate?

The GRM uses gross rent and the price; the cap rate uses net operating income (rent minus vacancy and operating expenses) and the price. The cap rate shows what the property earns after its running costs.

## Sources

- Indiana Department of Local Government Finance, IN.gov FAQ, I own a rental property (updated December 12, 2022): gross rent multiplier = sale price ÷ monthly gross income; market value = monthly market rent × GRM; $60,000 ÷ $525 = 114; $600 × 114 = $68,400. https://faqs.in.gov/hc/en-us/articles/115005067007-I-own-a-rental-property-To-stay-competitive-I-cannot-raise-the-rent-What-can-I-do-to-help-offset-the-increases-in-property-taxes (retrieved 2026-10-19)
- California State Board of Equalization, Appraisal Training, Lesson 9, Multipliers: Derivation and Valuation: a multiplier is the sale price ÷ gross income, applied by multiplying income by it; the gross income multiplier usually uses yearly income, monthly multipliers are sometimes used; $850,000 ÷ $126,000 = 6.75. https://www.boe.ca.gov/info/iav/lesson9.htm (retrieved 2026-10-19)
- Fannie Mae, Selling Guide B4-1.3-10, Cost and Income Approach to Value (06/04/2025): the income approach is required for 2- to 4-unit properties, and the appraisal must include the comparable rental and sales data and the gross rent multiplier calculations. https://selling-guide.fanniemae.com/sel/b4-1.3-10/cost-and-income-approach-value (retrieved 2026-10-19)