What is a good GRM for rental property?

A good GRM is at or below what comparable rentals in the same market have sold for. Lower means more rent per dollar of price. Nationally, most residential rentals trade between 8 and 12. Under 8 is cash-flow territory, over 12 is an appreciation market.

A GRM of 8 means monthly rent is about 1% of price, the old 1% rule, and under typical expenses it implies a cap rate near 7.6%, enough to cover a 30-year loan with 25% down at current rates. A GRM of 10 implies about 6.1%, which is thin. A GRM of 15 implies about 4%.

At 4% mortgage rates a GRM of 10 cash flowed comfortably. At 7% it does not. Multipliers under 6 usually signal a cheap market, rough property, or a rent figure worth checking. Compare to local sales, not to a national figure.