Gross Rent Multiplier (GRM) (GRM)
Direct definition
A quick investment metric equal to purchase price divided by gross annual rent.
Written by the Vabasso Mortgage Editorial Team · Reviewed against agency and federal sources · Read our editorial policy for how we research and review mortgage content
Plain-English explanation
GRM is a rough screening tool. Lower GRM often signals stronger cash-flow potential, but it doesn't account for expenses or vacancy.
Why it matters
It's useful for quickly comparing multiple properties before doing full underwriting.
Where you may see it
- Investment property analysis
- Property income statement
A real-world example
A property listed at $600,000 with $60,000 gross annual rent has a GRM of 10.
Educational and illustrative only
A common misunderstanding
A low GRM doesn't automatically mean a good investment — the metric ignores expenses, vacancy, and financing costs.
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This glossary provides general educational information. Mortgage terminology, qualification methods, forms, timelines, fees, program rules, and legal meanings may vary by lender, investor, loan program, property, occupancy, state, and transaction. Definitions do not represent loan approval, legal advice, tax advice, or a commitment to lend.
- Author
- Vabasso Mortgage Editorial Team
- Reviewed by
- Vabasso Mortgage Licensed Advisory Team
- Last reviewed
- July 30, 2026