Which term is used for residential properties to estimate value?

• A. Gross Income Multiplier
• B. Gross Rent Multiplier
• C. Market Price
• D. Reconciliation

Answer: (B)

For residential rental properties, the quick value estimate uses the gross rent multiplier. This method relates the rent the property brings in to an estimated value, making it a simple rule-of-thumb for homes or small multi‑units. The idea is value approximates the monthly gross rent multiplied by a market GRM: Value ≈ Gross Monthly Rent × GRM. For example, if a property rents for $1,500 a month and the market GRM is 100, the estimated value would be about $150,000. This approach focuses on rental income for smaller residential properties and is distinct from gross income multiplier, which uses annual income and is more common for larger commercial properties. It’s also separate from market price (the actual sale price) and reconciliation (the process of weighing different appraisals).