Gross Rent Multiplier Calculator
Calculate GRM, EGIM, NIM, and cap rate in one tool. Compare up to 3 properties side-by-side with market benchmarks by property type.
Gross Rent Multiplier
12.50
Overpriced
At a GRM of 12.50, it would take 12.50 years of gross rent to pay for this property
GRM
12.50
Gross
EGIM
13.16
Eff. Gross
NIM
17.86
Net Income
Cap Rate
5.60%
NOI / Price
Market Benchmark: Single Family (GRM 8–12, avg 10)
Income
Expenses → NOI
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A 5-15% rent increase from professional staging directly lowers your GRM and improves returns. Virtual staging at $0.10/photo.
GRM Guide: What's a Good Number?
How to interpret your Gross Rent Multiplier result:
< 6
Excellent
Exceptional value. Common in emerging markets or value-add opportunities.
6–8
Very Good
Strong cash flow potential. Typical for well-priced multi-family and commercial.
8–12
Average
Typical for single-family rentals in most US markets.
12–15
Below Average
Common in high-cost markets (SF, NYC). Appreciation-dependent returns.
15+
Overpriced
Likely negative cash flow. Only justified by strong appreciation expectations.
GRM vs Cap Rate vs NIM
GRM
Price / Gross Rent
✓ Quick, simple, 2 inputs
✗ Ignores expenses & vacancy
Best for: Initial screening
Cap Rate
NOI / Price
✓ Accounts for all expenses
✗ Requires detailed expense data
Best for: Comparing investments
NIM
Price / NOI
✓ Most accurate multiplier
✗ Complex, needs full analysis
Best for: Final decision-making
How to Use GRM Effectively
Quick Screening
Use GRM to quickly filter properties before diving into detailed analysis with cap rate and CoC.
Compare Apples to Apples
Only compare GRM within the same market, property type, and condition level.
Factor in Expenses
Switch to NIM or cap rate for accurate profitability — GRM ignores operating costs.
Boost Rental Income
Virtual staging of rental listings can increase rent 5-15% and lower GRM — for just $0.10/photo.
Example: How to Calculate GRM
Given: Property price = $300,000 | Monthly rent = $2,500
Step 1: Annual Gross Rent = $2,500 × 12 = $30,000
Step 2: GRM = $300,000 / $30,000 = 10.0
A GRM of 10 means it takes 10 years of gross rent to equal the purchase price. For a single-family home, this is average. If you found a similar property at GRM 8, that would be a better deal.
Frequently Asked Questions
What is a Gross Rent Multiplier (GRM)?
Gross Rent Multiplier (GRM) is a quick screening metric for investment properties. It equals the property price divided by annual gross rental income. A GRM of 10 means it would take 10 years of gross rent to equal the purchase price. Lower GRM = faster payback = better deal.
What is a good GRM for rental property?
A "good" GRM depends on property type and market. For single-family homes, 8-12 is typical (below 8 is excellent). Multi-family properties average 6-10. Condos typically range 10-15. Commercial properties 5-8. Always compare GRM within the same market and property type.
What is the difference between GRM, EGIM, and NIM?
GRM uses gross rent (no adjustments). EGIM (Effective Gross Income Multiplier) accounts for vacancy losses. NIM (Net Income Multiplier) uses NOI (after all operating expenses). NIM is the most accurate but requires detailed expense data. GRM is best for quick screening.
How does GRM compare to cap rate?
GRM and cap rate are inversely related but measure differently. GRM uses gross rent (before expenses), while cap rate uses NOI (after expenses). A low GRM indicates a good deal, while a high cap rate indicates a good deal. Cap rate is more accurate but requires expense data.
What are the limitations of GRM?
GRM ignores operating expenses, vacancy, financing costs, and property condition. Two properties with the same GRM can have very different profitability if one has higher expenses. Always use GRM alongside cap rate, cash-on-cash return, and detailed expense analysis.
How do I use GRM to compare properties?
Compare GRM only for similar properties in the same market. A lower GRM suggests better value relative to rental income. Use our Compare Properties feature to rank up to 3 properties simultaneously by GRM, EGIM, NIM, and cap rate.