Gross Rent Multiplier (GRM) Calculator – Evaluate Property Value Easily

What is Gross Rent Multiplier?

Gross Rent Multiplier (GRM) is a real estate investment metric that helps evaluate the value of a rental property based on its gross annual rental income.

It tells you how many years it would take for a property’s gross rent to pay back its purchase price — excluding expenses like taxes, insurance, or maintenance.

Formula to Calculate Gross Rent Multiplier

1. Gross Rent Multiplier (GRM)

Divide the total cost of the property by how much rent it earns in a year. A lower GRM usually suggests the property is a better investment, as you can recover your investment faster through rent. GRM is a helpful starting point, but it doesn't include costs like taxes or maintenance.

$\text{GRM}=\frac{\text{Property Price}}{\text{Gross Annual Rental Income}}$

2. Monthly Rental Income (optional)

Divide the annual rent by 12 months. Knowing the monthly rent is helpful when comparing it with monthly expenses like loan payments, taxes, or maintenance costs to see if the property is financially healthy.

$\text{Monthly Rental Income}=\frac{\text{Gross Annual Rental Income}}{12}$

Example Calculation

Suppose:

• Property Price = ₹6,000,000
• Gross Annual Rental Income = ₹600,000

Step 1: Calculate GRM

$\text{GRM}=\frac{6,000,000}{600,000}=10$

Step 2: Monthly Rental Income (Optional)

$\text{Monthly Rental Income}=\frac{600,000}{12}=50,000$​​​​​​​

What Does GRM Mean?

• A lower GRM usually means the property is generating more rent for its price — which is good for investors.
• A higher GRM means it might take longer to recoup the investment through rent.

⚠️ GRM does not account for expenses, so use it as a starting point, not a final decision.

Final Thoughts

The Gross Rent Multiplier is a quick and simple tool to screen potential rental property investments. It's great for comparing properties side by side — just plug in the price and annual rent!