How to Calculate The Gross Income Multiplier

The gross income multiplier (GIM) is a fast and easy way to estimate the value of an income producing property.

It should only be used as a first very basic reference, because it does not take into consideration the property’s operating expenses.

Using the gross income multiplier, you can compare annual rental income to a property’s fair market value. 

It’s vital that you understand that the GIM is not a substitute for in-depth research. It doesn’t include operating expenses, so it will not be completely accurate.

The formula is simply a way to estimate a rental property value at a glance. With the gross income multiplier results, you can decide whether you want to do more research or pass on a deal. 

Imagine that you’re researching properties in the area where you want to invest. You can use the formula to easily figure out the gross income multiplier of various homes on the market.

You can also use the gross income multiplier to determine fair market value based on the GIM or gross rent of comparable properties. 

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