Short answer: Gross rent multiplier (GRM) is a property's price divided by its yearly gross rent. A $200,000 home renting for $2,000 a month ($24,000 a year) has a GRM of 8.33. Lower means you pay less per dollar of rent. Using Census ACS 2024 medians, a typical home in the US has a GRM of about 17.9, and among the 50 largest rental markets it runs from 6.4 (Detroit, MI) to 31.5 (San Jose, CA).
Definition
Gross rent multiplier (GRM) is a rental property's price divided by its yearly gross rent. A $200,000 home renting for $2,000 a month has a GRM of 8.33; a GRM of 8.33 or lower is the same as passing the 1% rule.
By the numbers: Census ACS 2024: the US median home value ($360,600) divided by a year of median 3-bedroom gross rent ($1,677/mo) is a GRM of about 17.9. Across the 50 largest rental markets it runs from 6.4 in Detroit, MI to 31.5 in San Jose, CA. See all 50 markets.
What GRM is and how to calculate it
Gross rent multiplier is how many years of rent it would take to pay the purchase price, before any expenses. It is one of the quickest ways to compare rentals:
GRM = purchase price ÷ yearly gross rentA $200,000 house that rents for $2,000 a month brings in $24,000 a year, so its GRM is 200,000 ÷ 24,000 = 8.33. A lower GRM means you pay less for each dollar of rent. You can also flip it around to sanity-check a price:
Price at a target GRM = target GRM × yearly rentTip: Use the rent the home will actually get, from comparable rentals, not the seller's pro forma. GRM is only as good as the rent you put in it. Try the free GRM calculator.
GRM and the 1% rule are the same test
The 1% rule says monthly rent should be at least 1% of the price. Turn that into a multiplier and you get a GRM of 100 ÷ 12:
Passes the 1% rule ⇔ GRM ≤ 8.33So a GRM of 10 means rent is 0.83% of the price each month, and a GRM of 15 means 0.56%. Both shortcuts look only at price and rent. Neither one knows your taxes, insurance, HOA, repair budget or loan.
Good to know: There is no official "good" GRM. Investors compare a property with similar homes nearby, because GRM swings a lot from city to city, as the table below shows.
GRM of a typical home in the 50 biggest rental markets
Here is the median home value and the median 3-bedroom gross rent for the 50 US cities with the most renter households, from the Census Bureau's 2024 American Community Survey (tables B25077 and B25031), with the GRM you get by dividing one by the other. They are sorted from the lowest GRM to the highest. Click a city for its full market page.
| City (lowest GRM first) | Median home value | Median 3-bed rent / mo | GRM | Rent ÷ price |
|---|---|---|---|---|
| Detroit, MI | $95,900 | $1,255 | 6.4 | 1.31% |
| Cleveland, OH | $109,600 | $1,105 | 8.3 | 1.01% |
| Memphis, TN | $209,800 | $1,418 | 12.3 | 0.68% |
| San Antonio, TX | $260,900 | $1,707 | 12.7 | 0.65% |
| Baltimore, MD | $247,400 | $1,569 | 13.1 | 0.63% |
| El Paso, TX | $209,600 | $1,319 | 13.2 | 0.63% |
| Kansas City, MO | $261,600 | $1,641 | 13.3 | 0.63% |
| Philadelphia, PA | $253,600 | $1,573 | 13.4 | 0.62% |
| Omaha, NE | $269,500 | $1,658 | 13.5 | 0.62% |
| Milwaukee, WI | $207,900 | $1,273 | 13.6 | 0.61% |
| Houston, TX | $301,200 | $1,819 | 13.8 | 0.60% |
| Cincinnati, OH | $263,300 | $1,588 | 13.8 | 0.60% |
| Columbus, OH | $279,900 | $1,672 | 14.0 | 0.60% |
| Fort Worth, TX | $330,500 | $1,964 | 14.0 | 0.59% |
| Tulsa, OK | $234,400 | $1,371 | 14.2 | 0.58% |
| Indianapolis, IN | $241,500 | $1,406 | 14.3 | 0.58% |
| Oklahoma City, OK | $259,300 | $1,479 | 14.6 | 0.57% |
| Tucson, AZ | $299,700 | $1,688 | 14.8 | 0.56% |
| Dallas, TX | $340,400 | $1,856 | 15.3 | 0.55% |
| Jacksonville, FL | $325,300 | $1,767 | 15.3 | 0.54% |
| Louisville, KY | $241,700 | $1,294 | 15.6 | 0.54% |
| Orlando, FL | $430,200 | $2,293 | 15.6 | 0.53% |
| Chicago, IL | $341,200 | $1,661 | 17.1 | 0.49% |
| Fresno, CA | $396,300 | $1,902 | 17.4 | 0.48% |
| Albuquerque, NM | $324,600 | $1,550 | 17.5 | 0.48% |
| Minneapolis, MN | $368,300 | $1,748 | 17.6 | 0.47% |
| Phoenix, AZ | $454,900 | $2,142 | 17.7 | 0.47% |
| Nashville, TN | $438,800 | $2,064 | 17.7 | 0.47% |
| Charlotte, NC | $431,900 | $1,969 | 18.3 | 0.46% |
| Las Vegas, NV | $458,300 | $2,067 | 18.5 | 0.45% |
| Colorado Springs, CO | $479,500 | $2,145 | 18.6 | 0.45% |
| Tampa, FL | $494,400 | $2,176 | 18.9 | 0.44% |
| Raleigh, NC | $450,300 | $1,909 | 19.7 | 0.42% |
| Sacramento, CA | $515,800 | $2,170 | 19.8 | 0.42% |
| Atlanta, GA | $462,200 | $1,918 | 20.1 | 0.41% |
| Denver, CO | $636,400 | $2,570 | 20.6 | 0.40% |
| Portland, OR | $588,200 | $2,364 | 20.7 | 0.40% |
| Jersey City, NJ | $571,700 | $2,249 | 21.2 | 0.39% |
| Austin, TX | $571,000 | $2,217 | 21.5 | 0.39% |
| Miami, FL | $598,200 | $2,179 | 22.9 | 0.36% |
| Washington, DC | $733,400 | $2,567 | 23.8 | 0.35% |
| Long Beach, CA | $849,500 | $2,676 | 26.5 | 0.32% |
| San Diego, CA | $980,700 | $3,052 | 26.8 | 0.31% |
| Seattle, WA | $950,800 | $2,951 | 26.8 | 0.31% |
| Boston, MA | $722,800 | $2,153 | 28.0 | 0.30% |
| Oakland, CA | $884,000 | $2,474 | 29.8 | 0.28% |
| Los Angeles, CA | $947,900 | $2,564 | 30.8 | 0.27% |
| New York, NY | $778,600 | $2,094 | 31.0 | 0.27% |
| San Francisco, CA | $1,314,700 | $3,500+* | 31.3 | 0.27% |
| San Jose, CA | $1,271,200 | $3,368 | 31.5 | 0.26% |
| United States | $360,600 | $1,677 | 17.9 | 0.47% |
The median city on the list has a GRM of about 17.5, and the US figure is 17.9. Only 2 of the 50 (Detroit, MI, Cleveland, OH) pass the 1% rule at the median, 2 have a GRM under 12, and 16 are at 20 or higher. The range runs from 6.4 in Detroit, MI to 31.5 in San Jose, CA.
Good to know: These are rough benchmarks, not listing prices. The value is the median owner-occupied home and the rent is the median rent for 3-bedroom rentals, which are not the same houses. ACS gross rent includes utilities the renter pays, so the rent a landlord actually collects is often lower and the true GRM a bit higher. ACS reports rents above $3,500 only as "$3,500+" (marked *: San Francisco, CA), so that GRM uses $3,500 and is a ceiling.
What GRM misses
GRM uses gross rent, so two homes with the same GRM can be very different deals. Same $200,000 house at $2,000/mo, so the GRM is 8.33 every time, with 20% down at 7.40% (Freddie Mac average, October 15, 2026). Only the property tax rate (from the 50-city tax table) or an HOA fee changes:
| Scenario | GRM | Cap rate | Cash flow / mo | DSCR |
|---|---|---|---|---|
| Colorado Springs, CO tax rate (0.40%) | 8.33 | 8.84% | $366 | 1.33 |
| US tax rate (0.89%) | 8.33 | 8.35% | $284 | 1.26 |
| El Paso, TX tax rate (1.75%) | 8.33 | 7.49% | $140 | 1.13 |
| US tax rate + $250/mo HOA | 8.33 | 6.85% | $34 | 1.03 |
Same GRM, but cash flow runs from $366 to $34 a month and the cap rate from 8.84% to 6.85%. Click a row to open it in the calculator.
Red flag: Buying on GRM alone. It ignores property tax, insurance, HOA, vacancy, repairs, management and your mortgage. Use it to decide which listings deserve a full analysis, then run the real numbers.
From GRM to cap rate
If you know what share of rent goes to operating expenses (everything except the mortgage), GRM converts straight into a cap rate:
Cap rate ≈ (1 − expense ratio) ÷ GRMIn the US-tax-rate example above, operating expenses take about 30% of rent, so the cap rate is about (1 − 0.30) ÷ 8.33 = 8.35%. At the US figure of 17.9, the same expense ratio would give only about 3.88%. That is why a home in a high-GRM city is much harder to make cash-flow, even when the rent looks strong.
Tip: Score a real listing in the full deal calculator. It shows GRM's cousin, the 1% rule, next to cash flow, cash-on-cash and DSCR, so you can see whether a low GRM survives real expenses. For a quick expense check, see the 50% rule.
Worked example
A $200,000 single-family rental at $2,000/mo ($24,000/yr), 20% down at 7.40% for 30 years (Freddie Mac average, October 15, 2026), property tax at the US effective rate of 0.89% ($1,781/yr, Census ACS 2024), $1,200/yr insurance, 5% vacancy, 5% maintenance, 8% management, $6,000 closing costs.
| Price | $200,000 |
| Yearly gross rent | $24,000 |
| GRM (price ÷ yearly rent) | 8.33 |
| Operating costs (/mo) | −$608 |
| Mortgage (P&I) | −$1,108 |
Frequently asked questions
What is gross rent multiplier?
Gross rent multiplier (GRM) is a property's price divided by its yearly gross rent. A $200,000 home renting for $2,000 a month ($24,000 a year) has a GRM of 8.33. Lower means you pay less per dollar of rent. Using Census ACS 2024 medians, a typical home in the US has a GRM of about 17.9, and among the 50 largest rental markets it runs from 6.4 (Detroit, MI) to 31.5 (San Jose, CA).
How do you calculate GRM?
Multiply monthly rent by 12 to get yearly gross rent, then divide the price by it. To find the most you would pay at a target GRM, multiply the target by the yearly rent: a GRM of 10 on $24,000 of rent is $240,000.
What is a good gross rent multiplier?
There is no official standard, so compare a property with similar homes in the same area. A GRM of 8.33 or lower is the same as passing the 1% rule. Only 2 of the 50 largest US rental markets get there at median prices and 3-bedroom rents (Census ACS 2024); the median city on the list is about 17.5.
What is the difference between GRM and cap rate?
GRM uses gross rent and ignores every expense. Cap rate uses net operating income, which is rent minus vacancy, repairs, management, taxes, insurance and HOA, so it is the better measure of the building. Roughly, cap rate ≈ (1 − expense ratio) ÷ GRM.
Is GRM the same as the price-to-rent ratio?
They use the same math: price divided by a year of rent. Price-to-rent is usually used to compare buying with renting a home to live in, while GRM is used by investors to compare rental properties.
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Sources
Educational content, not financial advice. Loan programs and requirements change; confirm with a lender.