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gross income multiplier

   Also found in: Acronyms 0.01 sec.
gross income multiplier

A rule of thumb for evaluating the reasonableness of an asking price. One compares the monthly or annual gross income to the asking price and evaluates how that compares to typical ratios for similar properties. For example, some investors will not pay more than 100 times the monthly gross income for a property. If a house rents for $900 per month, the investor will pay $90,000 but no more.The method is not a good indication of value and would never be employed by an appraiser, but it has its uses as a preliminary qualifier or disqualifier of properties.
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Cap rates and gross income multipliers were generally consistent with their 2006 levels.
Stat of The Day: Apartment Buildings Not Selling So Much by Tom Acitelli / The New York Observer
Finally, the guideline cautions assessors regarding possible inclusion of nontaxable value when applying the gross income multiplier method.
Billboards and the legal and regulatory environment by Stoops, Dwain R.; Wolverton, Marvin L. / Appraisal Journal
In general, capitalization rates declined, gross income multipliers (GIMs) increased and the price per square foot increased across property types and in all markets.
Multi-family income property increases in value during 2006 by Real Estate Weekly
 
 
 
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