Gross Rent Multiplier [3030]

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An apartment building has 20 units that rent for $500 monthly and 30 units that rent for $750 monthly.  Collection loss is estimated at 3% and vacancy loss is estimated at 7%.  The building recently sold for $3,600,000.

What is the gross rent multiplier (GRM)?

GRM = Value (Sale Price) ÷ Monthly Rent

 

Units

Rent

Total

20

$500

$10,000

30

$750

$22,500

Total Rent

 

$32,500

 

 

 

 

Sale Price

$3,600,000

 

GRM

110.8

 

The gross rent multiplier does not consider vacancy and collection losses so that information is unnecessary for this problem.

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