Gross Rent Multiplier (GRM) is a method of calculating investment value by using the anticipated first year potential rental income (PRI) multiplied by a given factor (the GRM).  Mathematically, this method can be stated as follows:  GRM x first-year PRI = Investment Value, or stated another way, Investment Value/PRI = GRM

GRM as a valuation method is simple and quick to use.  However, it does not consider the effects of vacancy, credit losses, operating expenses, financing, and tax consequences on the value of a given property.  Nor does it go beyond the first-year's anticipated income.