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  • Writer's pictureRaphael Collazo

What is Gross Rent Multiplier?

Gross rent multiplier (GRM) is a measure used to evaluate the value of a commercial property based on the income it generates. It is calculated by dividing the price of the property by the gross annual rental income.


For example, if a commercial property is being sold for $1 million and it generates $100,000 in gross annual rental income, the GRM would be 10 (1,000,000 / 100,000).


GRM is often used as a quick and simple way to compare the value of different commercial properties, as it takes into account both the price of the property and the income it generates.


However, it is important to note that GRM is a rough estimate and may not always accurately reflect the true value of a property. It is typically used as a starting point for more detailed analysis and should be considered in conjunction with other factors, such as the location, condition, and potential for future income growth.


Throughout my career, I've helped many commercial real estate investors identify, negotiate and secure commercial properties that aligned with their investment goals. If you're an investor interested in purchasing property in Louisville, KY, or its surrounding areas, I'd be happy to help guide you through the process! Feel free to call/text me at (502) 536-7315 or email me at raphael@grisantigroup.com.

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