What is a good Gross Rent Multiplier?

[Jordan Vires]

What GRM range should one stay in when buy multi families and mobile home parks?

Thanks

Jordan

[Albert Bui]

It just means price / gross monthly rent sometimes appraisers use sales price / annual gross rents.

In most cases its sales price / gross monthly rent.

Example: 250,000 sales price / $2500 gross monthly rent = GRM of 100

It could mean that properties are trading at a GRM of 100 in this particular area so be sure to check out what the GRM is on nearby comparable properties.

GRM is only a comparison of gross rents and sales price not how efficient each property is "netting," in terms of income. The capitalization rate (cap rates) allows you to compare what properties "net," at the end of the day relative to the sales price the seller is asking for.