Gross rent multiplier (GRM) is a fast, rough screen: divide the property’s price by its annual gross rents. A $360,000 property renting for $36,000 a year has a GRM of 10. Lower GRMs suggest a cheaper price relative to the rent it produces.
GRM’s appeal is speed — it needs only price and gross rent, not a full expense breakdown. That’s also its weakness: because it ignores operating costs, vacancy, and financing, two properties with the same GRM can perform very differently. Use it to triage listings quickly, then run NOI and cap rate on the survivors.