GRM Calculator (Gross Rent Multiplier)
GRM = price ÷ annual rent. Quick comparison metric across deals.
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Implied price at different GRMs
Sam's Take
GRM is the back-of-envelope metric for whether a deal even deserves a real underwriting. Under 10 in any major US metro means the property cash flows easily. Above 15 means you're betting on appreciation, not cash flow. Most coastal markets (Boston, NYC, LA, SF) trade at 18-25 GRM — investors there are buying for future value, not current yield. New England working-class markets typically trade 8-12 GRM, which is one reason I've concentrated there.
Related Calculators
What GRM is, and why it's useful even though it's crude
GRM stands for Gross Rent Multiplier. It's one number: the property price divided by the annual gross rental income. So a $1.2M building bringing in $120K/year of gross rent has a GRM of 10. Lower GRM means more rent per dollar of price — better cash flow potential. Higher GRM means less rent per dollar of price — usually appreciation play, weaker current yield.
GRM is a crude metric. It ignores expenses, vacancy, financing, and CapEx. So why use it? Because it's the fastest possible filter for sorting deals. Both numbers — price and rent — are right at the top of every listing. You can compute GRM in 5 seconds without opening the marketing package. When you're scrolling through 30 listings, GRM is what tells you which 3 are worth opening up.
GRM vs cap rate — when to use which
Cap rate uses NET operating income (rent minus operating expenses), so it's more accurate. The problem is that NOI requires expense data, which is unreliable in broker marketing materials and requires real underwriting work to pin down. Cap rate is the right tool when you're seriously evaluating a deal.
GRM uses GROSS income — just price divided by rent. That's the right tool when you're at the very top of the funnel, comparing a stack of listings to figure out which ones deserve real attention. Use GRM to filter. Use cap rate (and full underwriting) on the deals that survive the filter.
GRM benchmarks by market type
- Working-class metros — GRM 6-10. Detroit, Cleveland, Pittsburgh, parts of New England outside the I-95 corridor. Cash flow markets — current yield is the whole story.
- Class B urban / sunbelt — GRM 10-14. Atlanta, Dallas, Phoenix, Charlotte. Mix of cash flow and appreciation.
- Class A coastal — GRM 16-25. Boston, NYC, LA, SF, San Diego. Appreciation play — you're not making money on rent, you're making money on the building doubling in value over 15 years.
One thing to know: the same property doesn't have to fit one bucket forever. New England triple-deckers in working-class neighborhoods 20 years ago were GRM 6-7 cash flow plays. Today many of those same buildings are GRM 12-14 because rent didn't keep up with price appreciation. Markets move. The benchmarks above are 2026 — pull current data when you're underwriting.