An apartment sold for $240,000 and the gross rental income per year is $30,000. What is the annual gross rent multiplier?

To find the annual gross rent multiplier (GRM), you divide the sales price of the property by the annual gross rental income. In this case, the apartment sold for $240,000, and the annual gross rental income is $30,000.

When you perform the calculation:

Annual Gross Rent Multiplier = Sales Price / Annual Gross Rental Income
Annual Gross Rent Multiplier = $240,000 / $30,000
Annual Gross Rent Multiplier = 8

This means that the correct answer is 8, indicating that the property's sale price is eight times its annual rental income. The GRM is a useful metric in real estate to quickly assess the value of an investment property based on the income it generates. A lower GRM suggests that an investor may be getting better value for the rent produced, while a higher GRM could indicate a higher price compared to the rental income.