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Gross Rent Multiplier Calculator

Divides a property's price by its annual gross rent to get the gross rent multiplier (GRM), the number of years of gross rent needed to pay the price, together with the gross yield.

When to use

You want a quick screen of an income property's price relative to its rent, or to compare listings before analysing expenses.

Do not use when: Operating expenses or vacancy matter for the decision (use cap-rate) or the property is financed and you want the return on your cash (use cash-on-cash-return). Informational only; not financial advice.

Formula

annual_gross_rent = annual_gross_rent or monthly_rent × 12; grm = property_price / annual_gross_rent; gross_yield_percent = 100 / grm

The GRM ignores vacancy, operating expenses, financing and taxes, so it is a screening ratio only; the 4–7 rule of thumb varies widely by market and property type. Informational mathematics only; not financial advice.

Inputs

Parameter	Type	Required	Description
`property_price`	number	yes	Asking or purchase price. Range: > 0, ≤ 1000000000000
`annual_gross_rent`	number	no	Total rent per year before expenses; takes precedence over monthly_rent. Range: > 0, ≤ 1000000000000
`monthly_rent`	number	no	Monthly rent (× 12), used when annual_gross_rent is omitted. Range: > 0, ≤ 10000000000

Outputs

Output	Type	Unit	Description
`annual_gross_rent`	number		annual_gross_rent, or monthly_rent × 12.
`grm`	number		property_price / annual_gross_rent.
`years_of_rent_to_pay_price`	number	years	Same number as the GRM, read as a payback time in years of gross rent.
`gross_yield_percent`	number	%	annual_gross_rent / property_price × 100 = 100 / GRM.
`interpretation`	string		Position relative to the commonly cited 4–7 range; a lower GRM means less price per unit of rent, which favours buyers.

Example

300,000 price, 30,000 annual rent: {"property_price":300000,"annual_gross_rent":30000} → {"annual_gross_rent":30000,"grm":10,"years_of_rent_to_pay_price":10,"gross_yield_percent":10,"interpretation":"High (above the typical 4–7 range): price is high relative to rent; lower is better for buyers"}

250,000 price, 1,800 monthly rent: {"property_price":250000,"monthly_rent":1800} → {"annual_gross_rent":21600,"grm":11.57,"gross_yield_percent":8.64}

GET https://tttkmbb.com/api/v1/calculate/gross-rent-multiplier?property_price=300000&annual_gross_rent=30000

Machine access

API: GET https://tttkmbb.com/api/v1/calculate/gross-rent-multiplier (query parameters) or POST with a JSON body {"inputs": {...}}
Schema: https://tttkmbb.com/api/v1/calculators/gross-rent-multiplier · Markdown: https://tttkmbb.com/investing/gross-rent-multiplier.md · JSON definition: https://tttkmbb.com/investing/gross-rent-multiplier.json
MCP: server https://tttkmbb.com/mcp, tool run_calculator with calculator_id="gross-rent-multiplier"
OpenAPI operationId: calculate_gross_rent_multiplier
Freshness: static. Authentication: none. Rate limit: fair use (see rate limits).

Sources

Wikipedia – Gross rent multiplier (reference)
Wikipedia – Capitalization rate (reference)

FAQ

Is a low GRM always good?

Not necessarily: a low multiplier can signal high expenses, a weak neighbourhood or deferred maintenance. Confirm with the cap rate and a full expense analysis.

Gross or net rent?

Gross: the multiplier uses rent before any expenses, which is why it can be computed from a listing alone.

Related calculators

Cap Rate Calculator — Yield after vacancy and operating expenses.
Rental Yield Calculator — Gross and net yield of a rental home.
Rent vs. Buy Calculator — Compare renting and buying the same home.