What is GRM?

Gross Rent Multiplier (GRM) is a simple way to compare rental property values based on their purchase price and gross annual rental income.

Formula:
GRM = Property Price ÷ Annual Gross Rent

Why It Matters

• Quick Screening: GRM gives investors a fast, apples-to-apples way to spot potential deals.

• Market Comparisons: Helps benchmark rents vs. pricing in different Phoenix neighborhoods.

• Starting Point Only: GRM doesn’t include expenses, so it shouldn’t be your final decision metric.

Example

A Phoenix rental property priced at $400,000 generates $36,000/year in gross rent.

GRM = 400,000 ÷ 36,000 = 11.1

Compare that to other properties in Phoenix — if similar homes have GRMs of 13 or 14, this one may offer stronger income potential relative to price.

What’s a “Good” GRM?

• In the Phoenix area, GRMs often fall between 10–14.

• Lower GRM = stronger gross income relative to purchase price (potentially better cash flow).

• Higher GRM = higher price relative to rent (often found in premium neighborhoods or new builds).

Final Thoughts

GRM is a great first filter — but never buy based on GRM alone. Use it to identify promising properties, then dig deeper into NOI, Cap Rate, and Cash-on-Cash Return.

As your Phoenix investor-friendly agent, I’ll help you use GRM alongside the full financial picture to make confident investment decisions.