Estimate only — not an appraisal, loan offer, or tax advice. Numbers stay in your browser.
Underwrite
Gross rent multiplier calculator
GRM is the lazy-but-useful cousin of cap rate: purchase price divided by gross annual rent — before expenses. Lower GRM often means more rent per dollar of price, but it ignores vacancy and OpEx, so it’s a screen, not a verdict.
Assumptions
Returns stack
- Annual rent
- —
- GRM
- —
- Implied price @ target
- —
When to use
Sorting a CMA dump, comparing two duplexes in the same submarket, or sanity-checking a price that “feels” high.
When not to
Don’t buy on GRM alone — a “cheap” GRM with insane taxes still loses. Don’t confuse GRM with cap rate.
Assumptions: Standard GRM uses gross annual rent (monthly × 12). Keep rent definition consistent across comps.
Worked examples
Input
Price $360,000 Rent $2,400 / mo ($28,800 / yr)
Output
GRM 12.5
Compare to recent local sales, not a national myth.
Input
Target GRM 10 Rent $28,800 / yr
Output
Implied price $288,000
Reverse the multiple when you know the GRM you’ll accept.
Common traps
- GRM ignores expenses — a “cheap” GRM with insane taxes still loses.
- Use the same rent definition (GPR vs EGI) across comps.
- Don’t confuse GRM with cap rate.
Next metric
Common questions
Market-specific; compare to recent local sales, not a national myth.
GRM uses gross rent; cap uses NOI.
Annual in the standard GRM formula.
No — always underwrite expenses and debt.