An apartment sold for $105,000 and the monthly gross rental income was $1,250. What is the monthly gross rent multiplier?

An apartment sold for $105,000 and the monthly gross rental income was $1,250. What is the monthly gross rent multiplier?

• A. 7
• B. 14.3
• C. 84
• D. 131

Answer: (C)

To determine the monthly gross rent multiplier (GRM), you divide the price of the property by the monthly gross rental income. In this scenario, the apartment sold for $105,000 and generates a monthly rental income of $1,250. Applying the formula: GRM = Property Price / Monthly Rent Substituting the given values: GRM = $105,000 / $1,250 = 84 So, the monthly gross rent multiplier is 84. This number indicates how many times the monthly rental income fits into the property price, which can be used by investors to assess the potential return on investment. A higher GRM indicates a higher price relative to income, suggesting lower initial cash flow from rents in relation to the purchase price.

To determine the monthly gross rent multiplier (GRM), you divide the price of the property by the monthly gross rental income.

In this scenario, the apartment sold for $105,000 and generates a monthly rental income of $1,250. Applying the formula:

GRM = Property Price / Monthly Rent

Substituting the given values:

GRM = $105,000 / $1,250 = 84

So, the monthly gross rent multiplier is 84. This number indicates how many times the monthly rental income fits into the property price, which can be used by investors to assess the potential return on investment. A higher GRM indicates a higher price relative to income, suggesting lower initial cash flow from rents in relation to the purchase price.