Gross Rent Multiplier Calculator
Compute the gross rent multiplier — price divided by annual rent — to screen rental deals in seconds before deeper analysis.
How it works
GRM = price ÷ (monthly rent × 12) · Gross rent-to-price = annual rent ÷ price × 100
The gross rent multiplier is the fastest back-of-envelope screen for rental property: purchase price divided by annual gross rent. A GRM of 10 means the price equals ten years of rent before any expenses. Because it uses gross rent and ignores taxes, vacancy and upkeep, GRM is a comparison shortcut, not a return — its value is speed. Investors use it to rank a stack of listings and weed out obvious overpays, then run cap rate and cash-on-cash on the survivors. Within one market, a lower GRM usually flags a better income deal.
Worked example
A property listed at $300,000 renting for $2,400 a month collects $28,800 a year. GRM = 300,000 ÷ 28,800 = 10.4 — meaning the price is a little over ten years of gross rent. A comparable listing at the same price renting for $2,700 would have a lower GRM of 9.3, more rent per dollar.
Frequently asked questions
What is a good gross rent multiplier?
Lower is better for a buyer, but "good" is market-specific — many investors see 4–7 as strong and 8–12 as typical. Because GRM ignores expenses, always compare within the same area and follow up with expense-aware metrics.
GRM vs cap rate — which should I use?
Use GRM first to screen many listings quickly, since it needs only price and rent. Use cap rate to actually evaluate a property, because it accounts for vacancy and operating expenses that GRM omits.
Should GRM use gross or net rent?
By definition it uses gross scheduled rent — all rent before expenses. A version using net operating income exists (the net multiplier), but the standard, widely quoted figure is the gross rent multiplier.
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Educational estimate, not financial or real-estate advice. Actual costs, rates and returns vary by lender, market and property.