Real Estate
Annual gross rent multiplier
The standard form, dividing price by a full year of gross rent.
The Formula
GRM = price / (monthly rent x 12)
The standard form, dividing price by a full year of gross rent.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| GRM | Gross rent multiplier | years | Years of gross rent. |
| P | Price | currency | The purchase price of the property. |
| r | Monthly rent | currency | The market monthly rent before costs. |
What Each Symbol Means
GRMyears
Gross rent multiplier
Years of gross rent.
Pcurrency
Price
The purchase price of the property.
rcurrency
Monthly rent
The market monthly rent before costs.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate gross rent multiplier page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Gross Rent Multiplier, filed under Finance. Every number the guide produces comes from substituting into this one line.