Gross Rent Multiplier (GRM) Calculator & 1% Rule Check

Gross rent multiplier (GRM) calculator

GRM = price ÷ annual gross rent. Use it as a fast way to compare rentals in the same market before you dig into expenses.

Results

Annual gross rent–

Value at the market GRM–

Rent as % of price (1% rule)–

Monthly rent needed for 1%–

Max price for 1% at this rent–

Gross rent multiplier–

GRM formula

GRM = price ÷ annual gross rent
Estimated value = annual gross rent × market GRM

Example: a $300,000 property renting for $2,500 a month ($30,000 a year) has a GRM of 10. If similar nearby rentals sold at a GRM of 9, this rent supports a value of about $270,000. The same property's rent is 0.83% of the price, below the 1% rule. It would need $3,000 a month, or a price of $250,000.

GRM vs. cap rate

GRM ignores expenses, so two buildings with the same GRM can have very different profits if one has high taxes, owner-paid utilities or deferred maintenance. Use GRM and the 1% rule to sort listings quickly, then run the survivors through the cap rate and cash flow calculators with real expense numbers.

Related calculators

Cap rate calculatorNOI ÷ price, plus value at a target cap rate.Expense ratio & 50% ruleHow much of your rent goes to expenses.Cash flow calculatorMonthly NOI, mortgage, cash flow and DSCR.

FAQ

What is a good gross rent multiplier?

Lower means you pay less for each dollar of rent, but there's no universal 'good' number. GRM is only meaningful compared with recent sales of similar properties in the same area.

What's the difference between GRM and GIM?

The gross rent multiplier uses rent only. The gross income multiplier uses all gross income, including parking, laundry and fees. For a typical small rental they're often nearly the same.

Is the 1% rule realistic?

In many higher-priced markets, few properties meet it. Treat it as a quick filter, not a buy-or-pass rule.