Gross Rent Multipliers From 4 to 20, in Real Numbers
A GRM is years of gross rent per dollar of price. The table shows what a $500,000 rental has to rent for at each multiplier, and the cap rate each one implies with 5% vacancy and expenses at 36% of collected rent. Pick a GRM for the full breakdown.
| GRM | Rent needed at $500,000 | Rent / price | Implied cap rate | Read as |
|---|---|---|---|---|
| 4x | $10,415 | 2.08% | 15.2% | Very low |
| 5x | $8,335 | 1.67% | 12.2% | Very low |
| 6x | $6,945 | 1.39% | 10.1% | Low |
| 7x | $5,950 | 1.19% | 8.7% | Low |
| 8x | $5,210 | 1.04% | 7.6% | Typical |
| 9x | $4,630 | 0.93% | 6.8% | Typical |
| 10x | $4,165 | 0.83% | 6.1% | Typical |
| 11x | $3,790 | 0.76% | 5.5% | Typical |
| 12x | $3,470 | 0.69% | 5.1% | High |
| 13x | $3,205 | 0.64% | 4.7% | High |
| 14x | $2,975 | 0.60% | 4.3% | High |
| 15x | $2,780 | 0.56% | 4.1% | High |
| 16x | $2,605 | 0.52% | 3.8% | Very high |
| 18x | $2,315 | 0.46% | 3.4% | Very high |
| 20x | $2,085 | 0.42% | 3.0% | Very high |
Run your own property in the GRM calculator, or see the rent each price point needs on the purchase price pages.