Gross Rent Multiplier

Archived in the category: Real Estate Terms & Definitions
Posted by admin on 23 Oct 12 - 1 Comment

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.

One comment for “Gross Rent Multiplier”

1
gherlashdawn

Great post! very informative and helpful, this is what I’m looking for I learned a little bit about investing, thanks for this!

October 31st, 2012 at 9:22 am

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