To use the "gross rent multiplier" (GRM) method, you need to compare a property to others in the area and figure out its value. To do this, you look at the rent of the comparable property and the sale price. For example, if the comparable property has a rent of $3,000 and a sale price of $450,000, then the GRM would be 150 ($450,000/$3,000). You can then apply this GRM to the subject property's rent to determine its value. So if the subject property has a rent of $3,200, the value would be $480,000 ($3,200 X 150 GRM).
These are questions that the above text answers:
1. What is the purpose of using the "gross rent multiplier" (GRM) method in real estate?
2. How do you calculate the gross rent multiplier (GRM) for a property?
3. What factors are considered when using the GRM method to determine property value?
4. Can the GRM method be used to compare properties in different areas?
5. How is the GRM applied to determine the value of a subject property?
6. What is the formula for calculating the value of a property using the GRM method?
7. If a comparable property has a rent of $2,500 and a sale price of $400,000, what would be the GRM?
8. If a subject property has a rent of $2,800 and a GRM of 175, what would be its value?
9. How does the GRM method help in determining the value of a property?
10. Can the GRM method be used for commercial properties as well?