“Hey everyone! Investing in property can feel complicated, but we’re going to break down one of the first, fastest, and most useful tools for any new real estate investor: the Gross Rent Multiplier (or GRM).
The GRM helps you quickly figure out how long it will take for a property’s gross rental income to equal its purchase price. It’s a simple ratio used to compare different investment properties. We take the Property Price and divide it by the Gross Annual Rent.
This song is your cheat sheet—let’s hit the high notes on the basics of the GRM!”
Gross Rent Multiplier (GRM) 🎶
(Verse 1 – Acoustic guitar intro, simple and clear)
You’re looking at a property, a building with some charm,
You’re trying to gauge its value, keep your money safe from harm.
You see the rent roll coming in, those tenants payin’ true,
But how much is the building worth? That’s what you wanna do.
(Pre-Chorus – Building energy, light percussion)
Forget the operating costs, the taxes and the light,
For this quick calculation, we’re keeping it so bright.
We need the Gross Scheduled Income—that’s the annual take,
Before a single expense is met, for goodness gracious sake!
(Chorus – Catchy, driving pop rhythm)
It’s the G-R-M, yeah, the Gross Rent Multiplier (ooh-ooh-ooh)
It’s a ratio, simple math, to fan your investor fire.
Property Price on the top line, that’s the number you have to face,
Divided by the Gross Annual Rent, right there in its place.
It’s a fast and easy benchmark to compare investment space!
(Verse 2 – Slightly more reflective, same rhythm)
Let’s say a place is selling for a hundred thousand bucks,
And all the rents together, are twenty thousand in its trucks.
You do the simple division, the numbers start to speak,
A five-point-oh GRM, that’s the figure that you seek.
(Pre-Chorus – Building energy, light percussion)
Now look at other buildings, in the neighborhood, the street,
Compare their multipliers too, to make your choice complete.
If one is at a six-point-oh, and yours is only five,
You know you’ve found a better deal, to help your cash survive!
(Chorus – Catchy, driving pop rhythm)
It’s the G-R-M, yeah, the Gross Rent Multiplier (ooh-ooh-ooh)
It’s a ratio, simple math, to fan your investor fire.
Property Price on the top line, that’s the number you have to face,
Divided by the Gross Annual Rent, right there in its place.
It’s a fast and easy benchmark to compare investment space!
(Bridge – Slowing down, focus on the concept, key change for emotional impact)
Remember, it’s a snapshot, it doesn’t tell the whole tale,
No utilities or vacancies, no maintenance or wail.
But for a quick and dirty look, comparing apples clear,
The Gross Rent Multiplier will quell your investment fear.
(Outro – Fading out with acoustic guitar and a final repeat)
Yeah, the G-R-M, oh, the G-R-M…
Price divided by the Gross Rent, you got the perfect gem.
(Fade out on acoustic strumming)
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