Gross Income Multiplier or Gross Rent Multiplier

The term Gross Income Multiplier or Gross Rent Multiplier (GRM) applies to a method used to approximate the value of an investment property. The formula: the property’s sale price ÷ gross annual rental income. The Gross Income Multiplier method can be useful in valuing commercial real estate, but a major drawback is that it fails to take into account the cost of key factors, among them: taxes, maintenance, utilities and vacancies.