Gross Rent Multiplier Calculator
Enter the price and the annual gross rent. You get the gross rent multiplier, the gross yield, and monthly rent as a share of price; enter a target multiplier to see the price it implies. Nothing is sent anywhere.
In one sentence: The gross rent multiplier is how many years of gross rent it takes to add up to the price, before any costs.
Formula: GRM = price ÷ annual gross rent; gross yield = annual rent ÷ price × 100; rent to price = monthly rent ÷ price × 100; price for a target GRM = annual rent × target.
A screen, not an analysis
The gross rent multiplier needs only two numbers that every listing shows, which is why investors use it to sort a long list of properties in minutes. A lower multiplier means more rent per unit of price. It ignores everything that makes properties differ once you own them: vacancy, taxes, insurance, repairs and management. Two buildings with the same multiplier can have very different net incomes if one is new and the other needs a roof. Use it to decide which properties deserve a full look, then move to the cap rate calculator with real expenses.
The rent-to-price line
Some investors prefer the monthly version: rent as a percentage of price. A multiplier of 10 is a gross yield of 10% and monthly rent of 0.83% of price. Rules of thumb such as a one percent monthly rent-to-price ratio circulate widely; they are shortcuts that worked in particular markets at particular interest rates, not laws, and the calculator shows the figure without claiming a target. Compare with what similar properties in the same area actually let for.
Working back to a price
If properties in an area trade at a multiplier of about eight, then eight times the rent is roughly what the market pays, and the last line gives that figure for any rent. It is useful as a first offer anchor and as a check on an asking price that assumes a rent the property has never achieved. For the full picture with financing, continue to the cash on cash return calculator; the rental yield calculator covers gross and net yield in the terms used in the UK and Europe.
Frequently asked questions
Should I use current rent or market rent?
Use the rent the property achieves today for the multiplier, and run it again with market rent if the current rent is clearly below it. Note which one you used.
Does GRM include other income such as parking or laundry?
Gross rent is usually rent only. Add other income if you compare consistently across properties.
Is my data stored?
No. Everything runs in your browser.