GRM: The Quick-and-Dirty Value Check the Exam Loves
The gross rent multiplier is deliberately crude — price divided by rent, ignoring every expense — which is exactly why the exam tests whether you know its limits as well as its arithmetic. One number to watch: GRM uses MONTHLY rent; its cousin GIM uses ANNUAL income.
The formula
GRM = Price ÷ Monthly gross rent · Value = GRM × Monthly rent
- GRM
- gross rent multiplier — uses MONTHLY rent
- GIM
- gross income multiplier — the annual-income version
- Gross
- before any expenses; GRM ignores vacancy, taxes, repairs
Try it live
Every intermediate step is shown — the goal is that on exam day you can run the same chain on paper.
Solver — enter the two you know
- Setup usedGRM = 312,000 ÷ 2,400
- Answer
- 130×
The method, worked in exam style
A duplex rents for $2,400 per month total and comparable properties sell at a GRM of 130. What is the indicated value?
- Value = GRM × monthly rent = 130 × 2,400.
- 130 × 2,400 = $312,000.
Answer: $312,000
The classic trap
The annual/monthly switch: 130 × (2,400 × 12) = $3.74M is nonsense, and dividing a price by ANNUAL rent gives a 'GRM' twelve times too small. If a multiplier is around 100–200 it's monthly (GRM); around 8–15 it's annual (GIM).
Practice problems
Work each on paper first, then open the solution. If your setup differs from the solution's first line, that — not arithmetic — is what to fix.
1. A fourplex sells for $540,000 with total monthly rents of $4,500. What GRM does the sale indicate?
Show the solution
- GRM = 540,000 ÷ 4,500 = 120.
Answer: 120
2. Comparables show a GIM (annual) of 9.5. A property grosses $60,000 per year. What is its indicated value?
Show the solution
- Value = GIM × annual income = 9.5 × 60,000 = 570,000.
Answer: $570,000
3. An investor uses a GRM of 145 and won't pay more than $348,000. What monthly rent must a property produce?
Show the solution
- Rent = Price ÷ GRM = 348,000 ÷ 145 = 2,400.
Answer: $2,400 per month
Math is one domain — the diagnostic measures all of them
The free 24-question adaptive diagnostic finds the difficulty level where your setup breaks down — in math and every other blueprint domain — and reports a Readiness Score with a stated confidence range.
Keep going: Cap rate · The T-method · Real Estate Math on the exam
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