Free calculator
Gross Rent Multiplier (GRM) Calculator
Enter price and gross annual rental income to get the gross rent multiplier and the 1% rule, both color-coded. Add a target GRM to get the value it implies.
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How to calculate GRM
Gross rent multiplier = Price ÷ Gross annual rental income
GRM is the price expressed as a multiple of gross rent, before any expenses. A $3,500,000 park with $600,000 of gross income is a 5.8x GRM. Flip it around: at a 6x target and $600,000 of gross, the implied value is $3,600,000. As a rough benchmark, a GRM above 10 is expensive (shown in red here); below 10 is more typical for income property (shown in green). It is a screen, not a rule, a strong market or heavy upside can justify a higher multiple.
The 1% rule
1% rule = (Gross annual rent ÷ 12) ÷ Price × 100
The 1% rule is the same idea inverted: monthly gross rent should be at least 1% of the price. At or above 1% (green) the rent-to-price is healthy for cash flow; below 1% (red) the property leans on appreciation to work. GRM and the 1% rule are two faces of one number, a 100x monthly GRM is exactly 1%, so an 8.3x annual GRM lands right at the 1% line.
What these screens hide
Both ignore expenses entirely, so they treat a park with high utility and payroll costs the same as a lean one at the same rent. Use them to sort the inbox, then move to cap rate and DSCR on a real NOI before you make an offer.
Questions
What is a good GRM?
Lower is cheaper, all else equal. As a rough screen, a GRM under about 10 is common for income property and above 10 starts to look expensive, but the right number varies by market and asset. Always confirm with cap rate on a real, expense-loaded NOI.
What is the 1% rule?
A quick screen that says a property's monthly gross rent should be at least 1% of its purchase price. A $600,000-a-year park ($50,000 a month) at $3,500,000 is about 1.43%, comfortably above 1%. It is a first filter, not a substitute for full underwriting.
GRM vs cap rate, what is the difference?
GRM and the 1% rule use gross income and ignore expenses; cap rate uses net operating income after expenses. GRM is faster but cruder. Cap rate is the number to trust for an offer because it reflects what the property actually nets.
Related calculators
These calculators are quick estimators for screening. A full RVP Underwriter analysis normalizes the seller's numbers, verifies occupancy, researches your county's taxes and insurance, and prices three offer structures against your DSCR and cash-on-cash targets. Run a deal free.