investment property: Gross Rent Multiplier - GRM - 12/07/07 05:57 AM
I recently sent out a spread sheet designed by someone else ... that had a formula on GRM.
While it is one of many ways to begin due diligence on an potential investment property, I prefer to use a simpler method. I like to calculate using "The 10% rule".
I divide potential annual rent into purchase price. When I started buying Calgary real estate in 2004, I would consider any property that yielded 10% and more. Today, I will consider any property that yields 6% or more.
The Gross Rent Multiplier or GRM is a ratio that is used to estimate the value of income … (3 comments)