Gross Rent Multiplier Calculator
The gross rent multiplier is a quick screen: price divided by annual rent. Use it to compare similar rentals, then check with a cap rate.
Gross Rent Multiplier Calculator
Enter your numbers; the result appears here.
Have a question about your situation, want tips, or need a referral? Email the CLRC team at [email protected]. We share general information, not legal advice, and we’re not a law firm.
Estimated value = comparison GRM × annual gross rent
How to use it
GRM ignores vacancy and expenses, so two properties with the same GRM can have very different profits. It works best for comparing similar properties in the same area when you do not yet have expense data. A lower GRM means you are paying less for each dollar of rent.
Worked example
Price $650,000, rent $3,200/month: annual rent $38,400; GRM = $650,000 ÷ $38,400 = 16.93. At a comparison GRM of 15, the indicated value is 15 × $38,400 = $576,000.
Rent assumptions must respect the statewide rent cap and any local rent-control or just-cause rules. Use the free rent increase calculator and check your county page before you plan on a rent increase. Vacancy and turnover also depend on notice and deposit timing: see the notice date calculator and deposit calculator.
Frequently asked questions
What is a good GRM?
It depends on the market. Lower is generally better for a buyer, but only among similar properties. Compare to recent sales of comparable rentals.
Why not just use cap rate?
Cap rate needs reliable expenses. GRM needs only price and rent, so it is a fast first screen; follow up with a cap rate.
Sources
- Civ. Code § 1947.12 (statewide rent cap)
- California Attorney General: limits on rent increases
- California DRE: Landlord-Tenant guide
This tool applies general California rules to the dates you enter. It cannot see your lease, your city’s ordinance or the facts of your situation. Check your local rent rules and consult a qualified attorney before you serve a notice or withhold a deposit. Read the disclaimer.