in real estate, sales price divided by the contract rental rate; a method of estimating the value of income-producing real estate that is somewhat crude since it fails to consider operating expenses, debt service, and income taxes. For example, if the sales price is $400,000 and the gross monthly contract rent is $4,000, then the GRM = $400,000 ÷ $4,000 = 100. GRM may also be expressed as the number of years of rent equaling the purchase price (GRM = $400,000 ÷ $48,000 annual rent = 8.333).
the sales price divided by the contract rental rate.
Example: The sales price is $200,000; the gross monthly contract rate is $2,000; the GRM = $200,000 ÷ $2,000 = 100. GRM may also be expressed as the number of years of rent equaling the purchase price ($200,000 ÷ $24,000 annual rent = a GRM of 8.333).
