What is a good gross rent multiplier?

Lower is generally better, since it means you pay less for each dollar of annual rent. As a rough screen, a GRM around 8 or below often clears the 1 percent rule and looks strong, while a GRM above about 12 means rents are low relative to price. There is no universal good number; a good GRM depends on the market, so compare against similar properties in the same area.

How do I calculate GRM?

Divide the property price by the gross annual rent, which is the monthly rent times 12. For example, a 245,000 dollar property renting for 2,500 a month has a gross annual rent of 30,000 and a GRM of about 8.17. A lower result screens better.

What is the 1 percent rule?

The 1 percent rule is a quick screen that says a rental's monthly rent should be at least 1 percent of its purchase price. Rent of 2,500 on a 245,000 property is about 1.02 percent, so it clears the rule. The 1 percent rule and the GRM measure the same price-to-rent relationship: 1 percent a month corresponds to a GRM of about 8.33.

GRM vs cap rate: what is the difference?

The GRM uses gross rent and ignores all expenses, so it is a fast first screen. The cap rate uses net operating income, which subtracts vacancy and operating expenses, so it measures the property's actual yield. GRM is quicker but cruder; cap rate is the real analysis. Use GRM to filter deals, then run the cap rate on the ones that pass.

What does my result mean?

The GRM tells you how many years of gross rent equal the price, so a lower number screens better. Check it against the 1 percent rule figure and against other properties in your market. If a deal passes this screen, run the full numbers with the cap rate and rental property ROI calculators before deciding, since GRM ignores expenses and financing.

Gross Rent Multiplier Calculator

Screen a rental deal fast with the gross rent multiplier, price divided by gross annual rent, with a 1 percent rule check and the implied price at a target GRM.

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Gross rent multiplier

8.17

Gross annual rent: $30,000.00
Rent as percent of price: 1.02%
Implied price at target GRM: $210,000.00
What this means: Rent is about 1 percent of price or more, so this clears the 1 percent rule and screens as a strong deal to analyze further

Quick answer: With the example inputs this page loads by default, the headline result (Gross rent multiplier) comes to 8.17. Screen a rental deal fast with the gross rent multiplier, price divided by gross annual rent, with a 1 percent rule check and the implied price at a target GRM. Change any input above and every figure updates instantly in your browser.

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The gross rent multiplier (GRM) is a property's price divided by its gross annual rent. It is the fastest way to screen a rental: a lower GRM means the price is lower relative to the rent, which generally screens better. Because it uses gross rent and ignores expenses and financing, it is a first-pass filter, not a full analysis. This calculator finds your GRM, checks the 1 percent rule, and shows the price for a target GRM.

What this result means

The GRM is a fast first screen, not a verdict on a deal. It tells you how many years of gross rent equal the price, so a lower GRM means you pay less per dollar of rent, which generally looks better. Because it uses gross rent and completely ignores vacancy, operating expenses, taxes, insurance, and your mortgage, treat it as a filter that decides which deals are worth a closer look, not as a measure of profit. The 1 percent rule is the same idea from the other side: rent of at least 1 percent of the price each month corresponds to a GRM of about 8.33 or lower, so clearing the rule and a low GRM go together. What counts as a good GRM depends heavily on the market, since low-price high-rent metros screen very differently from expensive coastal ones, so compare a GRM to other properties in the same area rather than to a universal number. When a deal passes this screen, run the full numbers with the cap rate and rental property ROI calculators before making a decision. This is an estimate for education, not financial advice.

Assumptions

The gross rent multiplier is the property price divided by the gross annual rent. Gross annual rent is the monthly rent you enter times 12, at full occupancy. A zero gross rent leaves the GRM undefined (shown as not applicable rather than dividing by zero).
The GRM uses gross rent only. It ignores vacancy, property taxes, insurance, maintenance, management, HOA dues, and financing, so it is a fast screen, not a measure of cash flow or profit. For those, use the cap rate or rental property ROI calculator.
Rent as a percent of price is the monthly rent divided by the price, the figure behind the 1 percent rule, which says monthly rent should be at least 1 percent of the price. A zero price leaves this undefined. The 1 percent rule corresponds to a GRM of 100 divided by 12, about 8.33, so a GRM at or below 8.33 clears the rule.
The implied price at a target GRM is your target GRM times the gross annual rent, the price at which the deal would hit the multiplier you want. It is shown as not applicable when the target is zero.
The screening read is a rough guide based on the GRM: at or below about 8.33 it clears the 1 percent rule and screens as strong, up to about 12 it is middling, and above 12 rents are low relative to price. A good GRM is market dependent, so compare against other properties in the same area rather than a universal number.
Not modeled: operating expenses, vacancy, financing and the mortgage, income taxes, capital expenditures, and any growth in rent or value. A low GRM is a reason to analyze a deal further, not a decision on its own.
This is an estimate for educational purposes only, not financial, legal, or tax advice. Rents, prices, and typical multipliers vary by market. Consult a qualified professional for guidance specific to your situation.

Key terms

Definitions for the terms this calculator uses, in our finance glossary .

How the gross rent multiplier is calculated

The gross rent multiplier (GRM) is the simplest way to screen a rental property. It is the price divided by the gross annual rent, so it tells you how many years of gross rent would equal the price.

GRM = property price / gross annual rent

Gross annual rent is the monthly rent times 12, at full occupancy. A lower GRM means the price is lower relative to the rent, which generally screens better.

The implied price at a target GRM

Turn the formula around and you get the price that would produce a GRM you want, at the current rent:

implied price = target GRM x gross annual rent

If a property rents for 30,000 a year and you only want to pay at a GRM of 7, you would need to buy it for 210,000. This is the fast way to set a maximum offer from a rent figure.

The 1 percent rule connection

The 1 percent rule says a rental’s monthly rent should be at least 1 percent of its price. That is the same price-to-rent relationship as the GRM, seen from the other side:

rent as percent of price = monthly rent / price x 100

Rent at 1 percent of price each month is 12 percent a year, so the price is 100 / 12 of the annual rent, a GRM of about 8.33. So a GRM at or below 8.33 clears the 1 percent rule, and a lower GRM (a higher rent percent) screens better. The two are two views of one number.

What GRM ignores, and why it is a screen not an analysis

The GRM uses gross rent only. It ignores vacancy, property taxes, insurance, maintenance, management, HOA dues, and your mortgage. That is what makes it fast, and also what makes it crude: two properties with the same GRM can have very different cash flow once expenses and financing are counted. Use the GRM to decide which deals are worth a closer look, then run the real numbers with the cap rate and rental property ROI calculators.

A good GRM is also market dependent. Low-price, high-rent metros routinely screen at single-digit GRMs, while expensive coastal markets rarely do, so compare a GRM against other properties in the same area rather than a universal number.

Worked example

Using the defaults: a 245,000 dollar property renting for 2,500 dollars a month, with a target GRM of 7.

gross annual rent = 2,500 x 12 = 30,000
GRM = 245,000 / 30,000 = 8.17
rent as percent of price = 2,500 / 245,000 x 100 = 1.02% (clears the 1 percent rule)
implied price at a GRM of 7 = 7 x 30,000 = 210,000

A GRM of 8.17 is at or below the 8.33 that corresponds to the 1 percent rule, so this property clears the rule and screens as a strong deal to analyze further. To hit a stricter GRM of 7, you would need to buy it for about 210,000 instead of 245,000.

What this includes and excludes

It includes the GRM, the gross annual rent, the rent-as-percent-of-price (the 1 percent rule figure), and the implied price at a target GRM. It excludes operating expenses, vacancy, financing, taxes, and any growth in rent or value. This is a screen, not a full analysis, and an estimate for education, not financial, legal, or tax advice.

Sources

U.S. Department of Housing and Urban Development and standard real-estate appraisal practice, gross rent multiplier as a market screening ratio (price divided by gross annual rent).
Consumer and investor real-estate education on the 1 percent rule as a quick rental screen.

Frequently asked questions

What is a good gross rent multiplier?: Lower is generally better, since it means you pay less for each dollar of annual rent. As a rough screen, a GRM around 8 or below often clears the 1 percent rule and looks strong, while a GRM above about 12 means rents are low relative to price. There is no universal good number; a good GRM depends on the market, so compare against similar properties in the same area.
How do I calculate GRM?: Divide the property price by the gross annual rent, which is the monthly rent times 12. For example, a 245,000 dollar property renting for 2,500 a month has a gross annual rent of 30,000 and a GRM of about 8.17. A lower result screens better.
What is the 1 percent rule?: The 1 percent rule is a quick screen that says a rental's monthly rent should be at least 1 percent of its purchase price. Rent of 2,500 on a 245,000 property is about 1.02 percent, so it clears the rule. The 1 percent rule and the GRM measure the same price-to-rent relationship: 1 percent a month corresponds to a GRM of about 8.33.
GRM vs cap rate: what is the difference?: The GRM uses gross rent and ignores all expenses, so it is a fast first screen. The cap rate uses net operating income, which subtracts vacancy and operating expenses, so it measures the property's actual yield. GRM is quicker but cruder; cap rate is the real analysis. Use GRM to filter deals, then run the cap rate on the ones that pass.
What does my result mean?: The GRM tells you how many years of gross rent equal the price, so a lower number screens better. Check it against the 1 percent rule figure and against other properties in your market. If a deal passes this screen, run the full numbers with the cap rate and rental property ROI calculators before deciding, since GRM ignores expenses and financing.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Cap Rate and GRM: What Each Metric Misses

By Sam Sage Last reviewed July 2026.