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Gross Rent Multiplier (GRM) for Savvy Investors

What is GRM?

The GRM is a simple calculation used by real estate investors to assess a property’s value. It is calculated by dividing the property’s purchase price by its annual gross rental income. The lower the GRM, the quicker an investor can recover their initial investment, making it a critical number when comparing properties.

GRM Calculation for 95 Brevard:

  •    Listing Price: $2,495,000

  •    Estimated Annual Gross Rental Income: $275,850 (based on a mix of long-term and short-term rental strategies)

   

GRM = Purchase Price / Annual Gross Rental Income

2,495,000

275,850

GRM =

~

~

9.05

A graph of the breakdown of income potential. It comes to the conclusion that the total effective gross income is $275,850.

What Does This Mean for Investors?

 

With a GRM of 9.05, this property offers a solid return on investment compared to other properties in the area. A lower GRM means that the property is priced well relative to its rental income potential, indicating a strong cash flow opportunity for investors looking to diversify their portfolios with a mixed-use, multi-unit property.

 

Why 95 Brevard?

 

  • Location: Prime spot in Cocoa, FL, just minutes from Cocoa Beach and a short drive from Orlando’s major attractions.

 

  • Flexibility: The mixed-use zoning allows for both residential and commercial opportunities, and the combination of long-term and short-term rentals maximizes revenue potential.

 

  • Strong Cap Rate: With a competitive cap rate and a favorable GRM, this property is positioned to provide excellent returns.

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