What gross rent multiplier is
Gross rent multiplier (GRM) is the property price divided by its gross annual rent. It's a quick screening ratio — how many years of gross rent it would take to equal the purchase price, ignoring expenses and financing.
The formula is price ÷ gross annual rent. If you only know monthly rent, multiply by 12 first (this calculator does that for you).
Worked example
A $300,000 property rents for $2,000/month. Gross annual rent is $24,000, so GRM = $300,000 ÷ $24,000 = 12.5. A lower GRM means the rent pays the price back faster — generally more attractive, all else equal.
How to use it
GRM is a triage tool, not a full underwrite — it ignores taxes, vacancy, and upkeep. Use it to compare similar properties quickly, then move to cap rate for a return that accounts for expenses. See the GRM explainer for more.
Whatever GRM you're working with, it's only as good as the rent number. Pull a free rent estimate for the address before you trust it.