Gross Rent Multiplier Calculator — GRM & Gross Yield
Enter a property price and monthly rent to calculate the Gross Rent Multiplier (GRM) — how many years of gross rental income it takes to equal the purchase price — plus the gross yield percentage for quick investment comparison.
Years of gross rent required to equal the property price
- 1
Annual gross rent
1,500 × 12 = 18,000 - 2
Gross Rent Multiplier
300,000 ÷ 18,000 = 16.67Years of gross rent income required to recover the full purchase price.
How does this calculator work?
GRM = Property Price ÷ Annual Gross Rent (= Monthly Rent × 12). It shows how many years of gross rental income equal the price. Gross Yield % = 1/GRM × 100. GRM is a quick screening tool only — it ignores vacancies, expenses and financing. Lower GRM generally means better value, but always benchmark against the local market.
Formula
How this is calculated
The Gross Rent Multiplier (GRM) is a quick real estate screening metric. It answers: at this rent, how many years of gross rental income would it take to recover the purchase price? A lower GRM means rent is high relative to price — typically a better deal on paper. Typical GRM ranges vary widely by market: in some US cities affordable rental markets sit at 8–12, while expensive gateway cities like New York or San Francisco can exceed 20.
GRM is calculated by dividing the property price by the annual gross rent (monthly rent × 12). It intentionally ignores vacancy, operating expenses, financing and taxes — which is both its strength (speed of comparison) and its weakness (it cannot account for actual cash flow). Two properties with the same GRM can have very different net operating incomes if one has higher expenses. Always follow up GRM screening with a full cap rate and cash-on-cash analysis before making an offer.
Gross yield is simply the inverse of GRM expressed as a percentage: Gross Yield = 1 / GRM × 100. A GRM of 10 equals a 10% gross yield; a GRM of 15 equals a 6.67% gross yield. Neither figure accounts for the net operating income — subtract vacancy, repairs, management fees, insurance and taxes to estimate actual net yield. Figures are estimates; actual rents should be verified with a local rental survey.
Frequently asked questions
There is no universal "good" GRM — it depends on the local market, property type and your investment strategy. As a general rule, a GRM below 10 is often considered strong in affordable markets, while urban markets regularly see GRMs of 15–25. Always compare GRM against similar properties in the same market rather than against an absolute benchmark.
GRM uses gross rent (before expenses); cap rate uses net operating income (after vacancy and operating expenses). GRM is faster to calculate but less accurate; cap rate is more reliable for comparing actual profitability. Both are screening metrics — neither replaces a full financial model.
No. GRM is calculated on gross scheduled rent — the rent if the property is always 100% occupied with no expenses. In practice you should reduce income by a vacancy allowance (commonly 5–10%) and subtract operating expenses to get net operating income before applying cap rate analysis.
Also known as
TG we-Calculate Editorial Team. (2026). Gross Rent Multiplier Calculator — GRM & Gross Yield [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/gross-rent-multiplier-calculator
TG we-Calculate Editorial Team. "Gross Rent Multiplier Calculator — GRM & Gross Yield." TG we-Calculate. 2026. https://we-calculate.com/calculator/gross-rent-multiplier-calculator.
TG we-Calculate Editorial Team, "Gross Rent Multiplier Calculator — GRM & Gross Yield," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/gross-rent-multiplier-calculator
@misc{wecalculate_gross_rent_multiplier_calculator, title = {Gross Rent Multiplier Calculator — GRM & Gross Yield}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/gross-rent-multiplier-calculator}}, year = {2026}, note = {TG we-Calculate} }
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