Platform · Glossary
GRM — Gross Rent Multiplier.
Purchase price divided by annual gross rent. The in-product report tooltip puts it tightest: "Gross Rent Multiplier. Price divided by annual gross rent."
GRM = Purchase Price ÷ Annual Gross Rent
A $300,000 property renting for $2,500/month ($30,000/year) has a GRM of 10. A $400,000 property with the same rent has a GRM of 13.3.
What GRM is good for
GRM is fast. You can compute it from a listing without knowing taxes, insurance, vacancy, or management. It's useful for comparing similar properties in the same submarket where expense structures are roughly similar — and for ruling out deals that are obviously too expensive relative to their rental income.
Why GRM is weak as a decision metric
GRM ignores everything that comes after the rent check arrives — property taxes, insurance, vacancy, maintenance, management, capital expenditures, and financing. A property with a 10 GRM in a state with 0.8% property tax is a very different deal from a property with a 10 GRM in a state with 2.5% property tax. The cap rate or operating cap rate is the right metric once you have actual expense data.