GRM

[Mia N]

How would the following question be answered.
I know that calculating the GRM is sales price dividided by gross annual income but this question is asking about money they gross multiplier.
Is it the same.

What is the monthly gross rent multiplier if a property sold for 300,000 and has 3 units that each rent for 1500.00 per month

 

[George Hatch]

3un x $1500/mo = $4500

$300,000 / $4500 = 66.67 GRM

 

[Mia N]

3un x $1500/mo = $4500

$300,000 / $4500 = 66.67 GRM

Thank you.

So if the question would ask what is the grm and not ask about monthly grm .

The answer would be what

 

[gregb]

$300,000 / $18,000 = 16.66 GRM

 

[Mia N]

So. Am I correct in stating that even though my question stated there are 3 units at 1500 each per month. The following calculating is incorrect.

300,000 ÷ 54,000 .which is 1500 x3 then x12.months.

And the correct calculation for the grm would be

300,000 ÷ 18000 .which is just 1500 x 12 months...= 16.66

 

[gregb]

Sorry.

GRM is 300,000 divided by 54,000 = 5.55

 

[DWiley]

I know that calculating the GRM is sales price dividided by gross annual income but this question is asking about money they gross multiplier.
Is it the same.

What is the monthly gross rent multiplier if a property sold for 300,000 and has 3 units that each rent for 1500.00 per month

GRM is sale price divided by monthly income, not annual income.
In this case, the monthly income is 1500 x 3 = 4500
Sale price is 300,000, so GRM = 300,000/4,500 = 66.67 (as GH stated)

 

[Terrel L. Shields]

GIM - gross (annual) income multiplier
GRM - gross (monthly) rent multiplier.

I actually saw an appraiser dinged on that for using GRM on a poultry farm appraisal. (They should have created an owner-op NOI statement and used a direct cap rate.)

 

[Mia N]

Thanks everyone for the replies.
I've been stuck on this very simple calculation...

I honestly must be missing something.
When Googled...it states this

Divide a propertys fair market value by its gross ANNUAL income yields the gross rental multiplier


what am i.missing