Gross Rent Multiplier (GRM)

Gross rent multiplier takes a property's price and divides it by a year of rent before expenses. That makes it the quickest screen for whether a finished BRRRR rental will produce enough income for its value, since it needs only two numbers that show up on nearly every listing.

On the default deal, $4,400 a month is $52,800 a year, so a $500,000 after-repair value is a GRM of about 9.5. Comparing that with the multipliers on nearby rental sales shows whether the rent and value assumptions agree with each other.

GRM ignores taxes, insurance, vacancy and repairs, so two properties with the same multiplier can produce very different cash flow. It is a first filter. The full BRRRR calculation, with operating expenses and the refinance payment, decides whether the deal works.

Further reading: Gross Rent Multiplier (GRM) on Wikipedia.