Gross rent multiplier is usually used for estimating the market value of the investment property. It is used when comparing properties in a similar area and of a similar type. It is assuming that when somebody has recently paid for example 8 times the gross scheduled income as a price for certain property, then the market value of a similar property, the investor is considering, should also be 8 times its gross scheduled income. This method is not very accurate, nor takes in count time value of money. It is advised to use it only as a simple benchmark, possible when comparing multiple properties between each other.

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