What is the annual gross rent multiplier of a duplex valued at $120,000 and combined rent of $950 per month?

To calculate the annual gross rent multiplier (GRM), you need to first determine the property's annual rental income and then divide the value of the property by this income.

1. Calculate Annual Rent: The combined rent for the duplex is $950 per month. To find the annual rent, you multiply the monthly rent by the number of months in a year:

[ Annual Rent = Monthly Rent \times 12 ] [ Annual Rent = 950 \times 12 = 11,400 ]

2. Calculate the GRM: Next, to find the GRM, divide the value of the property by the annual rent: [ GRM = \frac{Property Value}{Annual Rent} ] [ GRM = \frac{120,000}{11,400} \approx 10.53 ]

Thus, the annual gross rent multiplier for the duplex is approximately 10.53. This metric is useful for real estate investors as it provides a simple way to assess the potential income of a rental property relative to its value. A GRM of about 10.53 indicates how many years it would take