Gross Income Multiplier Calculator

✖Property Sale Price refers to the amount of money exchanged between the buyer and seller in a real estate transaction.ⓘ Property Sale Price [PSP]			+10% -10%
✖Effective Gross Income is the total income generated by a property after deducting vacancy and credit losses, providing a more accurate representation of its revenue.ⓘ Effective Gross Income [EGI]			+10% -10%

✖Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income.ⓘ Gross Income Multiplier [GIM]

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Formula

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Gross Income Multiplier

Formula

`"GIM" = "PSP"/"EGI"`

Example

`"16.36364"="450000"/"27500"`

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Gross Income Multiplier Solution

STEP 0: Pre-Calculation Summary

Formula Used

Gross Income Multiplier = Property Sale Price/Effective Gross Income
GIM = PSP/EGI
This formula uses 3 Variables

Variables Used

Gross Income Multiplier - Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income.
Property Sale Price - Property Sale Price refers to the amount of money exchanged between the buyer and seller in a real estate transaction.
Effective Gross Income - Effective Gross Income is the total income generated by a property after deducting vacancy and credit losses, providing a more accurate representation of its revenue.

STEP 1: Convert Input(s) to Base Unit

Property Sale Price: 450000 --> No Conversion Required
Effective Gross Income: 27500 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

GIM = PSP/EGI --> 450000/27500

Evaluating ... ...

GIM = 16.3636363636364

STEP 3: Convert Result to Output's Unit

16.3636363636364 --> No Conversion Required

FINAL ANSWER

16.3636363636364 ≈ 16.36364 <-- Gross Income Multiplier

(Calculation completed in 00.004 seconds)

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Credits

Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

Vishnu K has verified this Calculator and 200+ more calculators!

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Long Term Capital Gain

Go Long Term Capital Gain = Final Sale Price-Indexed Cost of Acquisition-Indexed Cost of Improvement-Cost of Transfer

Short Term Capital Gain

Go Short Term Capital Gain = Final Sale Price-Cost of Acquisition-Home Improvement Cost-Cost of Transfer

Effective Gross Income

Go Effective Gross Income = Potential Gross Rental Income+Other Income-Allowances for Vacancies and Bad Debts

Net Rental Yield

Go Net Rental Yield = ((Annual Rental Income-Annual Expenses)*(1/Property Value))*100

Cost Approach Appraisal

Go Property Value = Reproduction Cost-Depreciation+Value of Land

Gross Potential Rent

Go Gross Potential Rent = Number of Units Available for Rent*Annualised Market Rent

Qualifying Ratio

Go Debt to Income Ratio = (Total Monthly Debt Payments/Gross Monthly Income)*100

Vacancy Rate

Go Vacancy Rate = (Vacant Units in the Building*100)/Total Units in the Building

70 Percent Rule

Go Maximum Buying Price = (After Repair Value*0.7)-Estimated Repair Costs

Gross Income Multiplier

Go Gross Income Multiplier = Property Sale Price/Effective Gross Income

Gross Rent Multiplier

Go Gross Rent Multiplier = Property Value/Potential Gross Rental Income

Gross Rental Income

Go Potential Gross Rental Income = Property Value/Gross Rent Multiplier

Loan to Value Ratio

Go Loan to Value Ratio = (Mortgage Amount/Appraised Property Value)*100

Price per Square Foot

Go Price per Square Foot = Property Sale Price/Total Square Footage

Gross Rental Yield

Go Gross Rental Yield = (Annual Rental Income/Property Value)*100

Price to Rent Ratio

Go Price to Rent Ratio = Median Home Price/Median Annual Rent

Down-Payment Amount

Go Down Payment Amount = Final Sale Price*Percentage Payment

Rental Yield

Go Rental Yield = (Annual Rental Income/Property Value)*100

Land to Building Ratio

Go Land to Building Ratio = Area of Land/Area of Building

Commission Value

Go Commission Value = Commission Rate*Final Sale Price

Floor Area Ratio

Go Floor Area Ratio = Gross Floor Area/Total Lot Size

Property Tax Rate

Go Property Tax Rate = Assessed Value*Mill Rate

Debt Ratio

Go Debt Ratio = Total Debt/Total Assets

Annual Rental Income

Go Annual Rental Income = Monthly Rental Income*12

Gross Income Multiplier Formula

Gross Income Multiplier = Property Sale Price/Effective Gross Income
GIM = PSP/EGI

What is Gross Income Multiplier?

The Gross Income Multiplier (GIM) is a real estate metric used to evaluate the value of income-producing properties. It is calculated by dividing the property's sale price or value by its gross annual rental income. The GIM provides a simple way to compare similar properties by considering their income potential relative to their market value. A lower GIM indicates a potentially better investment opportunity, as it suggests that the property is generating more income relative to its cost. However, it's essential to note that the GIM does not take into account operating expenses, vacancy rates, or other factors that can significantly impact the profitability of a property. Therefore, while GIM is a useful tool for initial property comparisons, it should be used in conjunction with other financial metrics for a comprehensive investment analysis.

How to Calculate Gross Income Multiplier?

Gross Income Multiplier calculator uses Gross Income Multiplier = Property Sale Price/Effective Gross Income to calculate the Gross Income Multiplier, The Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income. Gross Income Multiplier is denoted by GIM symbol.

How to calculate Gross Income Multiplier using this online calculator? To use this online calculator for Gross Income Multiplier, enter Property Sale Price (PSP) & Effective Gross Income (EGI) and hit the calculate button. Here is how the Gross Income Multiplier calculation can be explained with given input values -> 8 = 450000/27500.

FAQ

What is Gross Income Multiplier?

The Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income and is represented as GIM = PSP/EGI or Gross Income Multiplier = Property Sale Price/Effective Gross Income. Property Sale Price refers to the amount of money exchanged between the buyer and seller in a real estate transaction & Effective Gross Income is the total income generated by a property after deducting vacancy and credit losses, providing a more accurate representation of its revenue.

How to calculate Gross Income Multiplier?

The Gross Income Multiplier is a metric used in real estate to determine the value of a property based on its gross rental income is calculated using Gross Income Multiplier = Property Sale Price/Effective Gross Income. To calculate Gross Income Multiplier, you need Property Sale Price (PSP) & Effective Gross Income (EGI). With our tool, you need to enter the respective value for Property Sale Price & Effective Gross Income and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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