Is a higher or lower GRM better?

Lower is better for a buyer. A lower GRM means the property produces more rent per dollar of price, so it pays for itself in fewer years and is more likely to cash flow. A GRM of 8 is one eighth of the price in rent each year. A GRM of 12 is one twelfth.

Lower is not free. Buyers accept a low GRM when they see more risk or less growth: older stock, weaker demand, a declining area. A multiplier under 6 is a reason to check the rent and the neighborhood.

Higher multipliers mean buyers are paying for appreciation or location rather than current rent. With strong rent growth, a GRM of 14 today can be a GRM of 10 on the same price in five years. For a seller, higher is better. For a buyer focused on income, lower wins.