property evaluator real estate investment calculator

#PROPERTY EVALUATOR REAL ESTATE INVESTMENT CALCULATOR HOW TO#

The result of the GRM calculation is the number of years it will take for the investment to pay for itself.Īs you can see from the way the gross rent multiplier works, it’s straightforward and easy to use.

You use the two values to calculate the gross rent multiplier this way: Now you have the figure for gross annual rent-$87,600. To calculate the gross rent multiplier, you should multiply the monthly income by 12. You know that the average monthly rental income is $7,300. Let’s say that you are thinking about buying an investment property that is selling for $650,000. Let’s look at a few examples to see how the GRM calculator works practically. Property price ÷ gross annual income = gross rent multiplier.Here is how the simple GRM calculation works: The results of the calculation express the potential value of the investment. The formula uses the ratio of the property’s fair market value to the gross rental income.

#PROPERTY EVALUATOR REAL ESTATE INVESTMENT CALCULATOR HOW TO#

How to Use the Gross Rent Multiplier CalculatorĮvery successful property investor should know the basics of using the GRM calculator.

GRM calculations can help compare similar properties to spot lucrative investments You can use figures that you already know-annual rent and property value The Gross Rent Multiplier is simple and straightforward to use Using the GRM calculator has three significant benefits. The calculation results predict the number of years it would take for the property to pay for itself.Ī lower figure represents a better potential the investment. Using these values, the GRM calculator gives you a useful metric that determines if the property is worth investigating more. Real estate investors use the GRM calculation to compare properties based on their projected gross income and market value.Īlso called the Gross Income Multiplier, the GRM calculator relies on two figures-the property sale price and monthly income from rent. The Gross Rent Multiplier (GRM) calculator is a vital tool to assess an investment property’s profitability.

Property evaluator real estate investment calculator