Gross rent multiplier (GRM) is how you determine how long it will take you to pay off a property. The gross rent multiplier formula will help you determine the price of a home, how much rent should be, and how long you will have to wait to pay off the property's loan.
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The gross rent multiplier formula is easy to remember. All you have to do is divide the property value by how much revenue the property gives you in a year.

For example, the property value is $480,000 and the annual gross rent income is $48,000. You will get the number 10 which indicates that you will take 10 years to pay off the house.

Now remember, a good gross rent multiplier is somewhere between 5 to 7. Anything about that will start to become a poor investment.

Real estate investors use the gross rent multiplier to determine whether or not an investment is worth it. They will also compare two different property's GRM to determine which one is the better deal.

Chapters:
00:00 What is a gross rent multiplier?
00:20 Why do we use the gross rent multiplier?
00:40 How to pick a good investment property
01:07 What is the gross rent multiplier formula?
02:25 How to pick between two investment properties
04:03 How long will it take you to pay off a property?
04:25 Here is why so many investors use the gross rent multiplier
05:00 The one problem with the gross rent multiplier

#grossrentmultiplier #realestateinvest #realestateinvesting
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