Gross Rent Multiplier (GRM) and Gross Income Multiplier (GIM)

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FLORIDA REAL ESTATE SALES ASSOCIATE COURSE

Real Estate Appraisal

Section 23 of 26

For smaller properties, a simplified version of the income approach is used. The Gross Rent Multiplier (GRM) is typically used for single-family rentals or small duplexes and is calculated by dividing the Sale Price by the Monthly Gross Rent. The Gross Income Multiplier (GIM) is used for larger commercial properties and uses Annual Income. While these multipliers provide a quick "rule of thumb" estimate for investors to compare properties, they do not account for operating expenses or vacancies, so they do not act as a substitute for the comprehensive income capitalization approach.