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gross rent multiplier

   Also found in: Acronyms, Wikipedia 0.01 sec.
gross rent multiplier
See gross income multiplier.


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In the next part of the equation the Gross Rent Multiplier, or GRM, is arrived at by taking the properties monthly operating income and dividing that by the properties purchase price.
For example, the income approach as developed on the current uniform Fannie Mae residential appraisal form requests the input of a GRM or gross rent multiplier that is derived via the ratio of market values to market rents (market value/market rent = GRM).
There also are some ratios that investors like to use, including gross rent multiplier, or GRM (often used to value multi-family properties), the cash on cash ratio, the relationship between annual before tax cash flow and the amount of money the investor contributed from his own pocket, and the capitalization, or CAR rate which is the annual net operating income divided by the value of the property.
 
 
 
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