Gross Rent Multiplier Calculator

Calculate a property's gross rent multiplier (GRM) from price and rent, see the rent a target GRM requires, and screen deals in seconds.

Published: 2026-10-03

Updated: 2026-10-03

Quick Answer

Gross Rent Multiplier Calculator estimates gross rent multiplier (grm) of 13.89 and gross annual rent of $36,000 for this scenario.

Key Takeaways

Gross Rent Multiplier Calculator estimates gross rent multiplier (grm) of 13.89 and gross annual rent of $36,000 for this scenario.
The gross rent multiplier divides the price by the gross annual rent: $500,000 ÷ $36,000 = 13.89. In plain terms, at the current rent it takes about 13.9 years of gross rent to equal the purchase price — before any expenses, which is exactly why GRM is a screening tool rather than a verdict.
Lower means rent is cheaper relative to price. Many cash-flow investors screen for a GRM under 8–10, while expensive coastal markets routinely trade at 15–20. There is no universal 'good' — compare within the same market. This property works out to 13.89.

Calculation Output

Gross Rent Multiplier (GRM)

13.89

Gross Annual Rent

$36,000

Rent-to-Price Ratio (monthly)

0.60%

Monthly Rent Needed for Target GRM

$4,167

Value This Rent Supports at Target GRM

$360,000

Result Chart

Gross Rent Multiplier (GRM)

13.89

Gross Annual Rent

$36,000

Rent-to-Price Ratio (monthly)

0.60%

Monthly Rent Needed for Target GRM

$4,167

Value This Rent Supports at Target GRM

$360,000

Key Facts

Gross Rent Multiplier (GRM)	13.89
Gross Annual Rent	$36,000
Rent-to-Price Ratio (monthly)	0.60%
Monthly Rent Needed for Target GRM	$4,167
Value This Rent Supports at Target GRM	$360,000

How This Estimate Works

The gross rent multiplier divides the price by the gross annual rent: $500,000 ÷ $36,000 = 13.89. In plain terms, at the current rent it takes about 13.9 years of gross rent to equal the purchase price — before any expenses, which is exactly why GRM is a screening tool rather than a verdict.
This property's GRM sits between 12 and 15 — pricey relative to current rent, so the deal needs rent growth, low expenses, or appreciation to carry it.
The monthly rent-to-price ratio is 0.60% — the same relationship the 1% rule tests, where 1.00% or more is considered strong for cash flow. To hit a GRM of 10 at this price, the property would need to rent for about $4,167 a month; working the other way, today's rent supports a price of roughly $360,000 at that GRM.
Use GRM to compare properties in the same market quickly, then hand the survivors to a full analysis — cap rate for income after expenses, cash flow and DSCR once financing enters the picture. GRM treats a dollar of rent in a low-tax, low-insurance area as identical to one in an expensive market, and your bank account will not.

FAQ

What is a good gross rent multiplier?

Lower means rent is cheaper relative to price. Many cash-flow investors screen for a GRM under 8–10, while expensive coastal markets routinely trade at 15–20. There is no universal 'good' — compare within the same market. This property works out to 13.89.

How is GRM different from cap rate?

GRM uses gross rent and ignores every expense; cap rate uses net operating income after vacancy and operating costs. GRM is faster and fine for a first screen, cap rate is the honest number for comparing finalists. A low GRM with brutal taxes or insurance can still be a worse deal than a higher-GRM property with cheap costs.

What rent do I need for a GRM of 10?

Divide the price by the target GRM, then by 12. On this property that is $4,167 per month. If market rent is well below that figure, the price only works at a higher GRM — which the market may happily pay, but your cash flow will feel it.

Does GRM work for multi-unit and commercial property?

Yes — GRM was popularized on small multifamily and works anywhere you have a price and a gross rent roll. It gets shakier as properties get more different from each other (mixed unit sizes, master-metered utilities, below-market leases), which is when to graduate to cap rate and a full expense review.