Lease

A lease is the contract between landlord and tenant that sets the rent, the term and each side's obligations. For a buyer, the leases in place are the source of the rent figure in a gross rent multiplier. Their terms decide whether that rent is dependable or about to change.

Read the leases before trusting the GRM. A lease that expires next month at $3,500 on a unit worth $4,000 means the in-place GRM of 11.9 will fall to 10.4 once it renews at market. A lease locked for three years below market means the higher GRM holds for the whole term.

Check who pays what. A lease that makes the tenant pay water and trash leaves more of the same rent for the owner than one that includes them. Two properties at the same GRM with different lease terms are not the same investment, and the difference shows up only after the purchase.

Further reading: Lease on Wikipedia.