What does GRM stand for in the context of property evaluation?

In the context of property evaluation, GRM stands for Gross Revenue Multiplier. This term is widely used in real estate appraisal as a key metric for assessing the value of income-generating properties, particularly in the residential rental market. The Gross Revenue Multiplier is calculated by dividing the property's sale price by its gross annual rental income.

This metric helps appraisers and investors quickly estimate the potential investment return on a property, giving insight into its valuation based on current income levels. It is useful for comparing one property to another or to the market as a whole, allowing for a quick assessment of whether a property is priced appropriately given its income potential. Understanding GRM is crucial for appraisers when conducting comparative market analyses and for making informed investment decisions.