GRM (gross rent multiplier)

Purchase price divided by annual gross rent. A back-of-napkin valuation shortcut.

GRM is cap rate's lazy cousin — it ignores expenses. Useful for ranking comps quickly within a single market type. A 1-bed condo with GRM 10 in a market where similar properties trade at 8 may be overpriced (or have unusually high rent). Always follow up with full NOI analysis.