Gross Rent Multiplier (GRM): a Tool for Real Estate Investors If you are a real estate investor, then you know the importance of screening potential investment properties. One tool that you can use to do this is the gross rent multiplier (GRM). The GRM ratio is simply the price of a property divided by its annual gross rental income. This number can tell you a lot about a property and whether or not it would be a wise investment. For example, let’s say you are considering two properties. Property A has a GRM of 12 and property B has a GRM of 20. This means that property A would cost $12,000 for every $1000 in gross rental income and property B would cost $20,000 for every $1000 in gross rental income. In this blog post, we will discuss the gross rent multiplier and how to use it to screen investment properties! So, what is the gross rent multiplier? Gross rent multiplier is a tool that real estate investors use to screen prospective investment properties. The Gross Rent Multiplier (GRM) is simply a ratio expressed as the price of a property divided by its annual gross rental income. In general, lower ratios mean higher cash returns for investors. The gross rent multiplier can be used to compare similar properties. For example, if one property has a GRM of 10 and another has a GRM of 7, the rental property with the GRM of 7 will likely have a higher cash return because it is selling for a lower price in relation to its gross rental income. Put another way, the rental property with the gross rent multiplier of 7 has a higher rent compared to its price. Gross rent multipliers aren’t useful in predicting the actual cash flow of a real estate investment. The formula does, however, indicate the likelihood that a property will be a profitable investment. Gross Rent Multiplier Formula The gross rent multiplier formula is very simple.