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The Gross Rent Multiplier is a ratio that is used to estimate the
market value of income producing properties. It provides a
rough estimate of value and requires minimal financial data to
calculate. The gross rent multiplier is equal the sales price
divided by the gross rents possible. The On Target software
calculates the gross rent multiplier for each year 1 through 10
based on the investor's assumptions for income growth rate and
appreciation growth rate. The GRM value for year 1 should be given
the greatest weight since it applies to the investor's first year of
operation. Investors use a market GRM to get a quick estimate of
value. A market GRM is calculated by averaging the GRM values for recent sales
of similar income properties in a given market place. To learn
more about the GRM, click on
the following link. Gross
Rent Multiplier
Note:
The Gross Rent Multiplier graphic can be displayed and printed in
2D Line, 2D Column, 2D Cylinder, 2D Area, 3D Column, 3D Cylinder and
3D Area format.
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