ROI Math

Real estate calculator

GRM Calculator

Calculate gross rent multiplier from purchase price and gross rental income. Use GRM to screen whether a property's price is reasonable relative to rent, then compare the implied value at a target GRM and the rent needed to reach that target.

Last updated 2026-06-21

GRM Calculator
Gross rent multiplier from price and gross rental income.
GRM 8.33x
$
$
$
x
Gross rent multiplier
Price divided by annual gross income
8.33x
Annual gross income
$60,000
Value at target GRM
$480,000
Required rent
To hit 8.00x
$5,208
Price above target
$20,000
GRM is a fast rent-to-price screen. It ignores vacancies, operating expenses, financing, property condition, and taxes, so use it before cap rate and cash-flow underwriting, not instead of them.

GRM formula

Gross rent multiplier equals purchase price divided by annual gross rental income:

GRM = Purchase price ÷ Annual gross income

A property listed for $500,000 with $5,000 per month of rent has $60,000 of annual gross income and an 8.33 GRM.

When GRM is useful

GRM is useful for a fast screen when expense data is incomplete. It can flag listings that are clearly expensive or cheap relative to rent, but it should not decide the investment.

After GRM, use the cap rate calculator to include operating expenses and the break-even occupancy calculator to stress-test vacancy.

How to calculate GRM in 3 steps

  1. Add monthly rent and other monthly income, then multiply by 12.
  2. Divide the purchase price by annual gross income to get GRM.
  3. Compare the result with similar local properties, then move to cap rate and cash-flow underwriting.

Frequently asked questions

What is GRM?

+

GRM, or gross rent multiplier, is the purchase price divided by annual gross rental income. It is a quick rent-to-price screen for income property, before expenses, vacancy, financing, or taxes.

How do you calculate GRM?

+

Divide the property price by annual gross income. For example, a $500,000 property with $60,000 in annual gross income has an 8.33 GRM ($500,000 ÷ $60,000).

What is a good GRM?

+

A good GRM depends heavily on the local market and asset type. Lower GRM usually means the property is cheaper relative to rent, but it can also signal higher expenses, weaker condition, or more risk. Compare only against similar local properties.

Does GRM include expenses?

+

No. GRM uses gross income only. It does not include vacancy, operating expenses, capital repairs, taxes, insurance, or mortgage payments. Use cap rate and cash flow after the initial GRM screen.

What is the difference between GRM and cap rate?

+

GRM compares price with gross income, while cap rate compares price with net operating income after operating expenses. GRM is faster but less complete; cap rate is better for comparing true income yield.

This GRM calculator is for educational estimates only and is not financial or investment advice. GRM ignores vacancy, expenses, financing, taxes, property condition, and capital repairs, so verify the full underwriting before making an offer.