SS268: Gross Rent Multiplier Explained (And Why Most Investors Misuse It)

Описание: Gross Rent Multiplier (GRM) is one of the most commonly used metrics in real estate investing but it’s also one of the most misunderstood.

In this Strategy Saturday episode, Charles Carillo breaks down what the Gross Rent Multiplier is, how investors actually use it, and why most investors misuse it when analyzing rental properties.

GRM is a fast, back-of-the-napkin screening tool that can help you evaluate dozens of deals quickly but relying on it alone can lead to bad investment decisions. This video explains when GRM is useful, when it becomes dangerous, and what critical factors it completely ignores, including expenses, CapEx, vacancy, and financing.

If you invest in rental properties or multifamily real estate, this episode will help you avoid common analysis mistakes and improve your deal screening process.

🔹 What You’ll Learn in This Video:
What the Gross Rent Multiplier (GRM) actually measures
How to calculate GRM correctly
When GRM is useful for screening deals
Why GRM can be misleading if used incorrectly
Key limitations most investors overlook
Why GRM is not a replacement for full underwriting

⏱️ Chapters

00:00 – Why Investors Use Quick Screening Metrics
00:19 – What Is Gross Rent Multiplier (GRM)?
00:47 – How to Calculate the Gross Rent Multiplier
01:09 – How Investors Use GRM to Screen Deals
01:28 – Why a Lower GRM Looks More Attractive
01:47 – Major Limitation #1: GRM Ignores Expenses
02:04 – Major Limitation #2: CapEx & Deferred Maintenance
02:17 – Major Limitation #3: Vacancy & Financing
02:32 – Why GRM Is Not a Substitute for Underwriting
02:54 – The Right Way to Use GRM as an Investor

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