Gross Income Multiplier

AAA

DEFINITION of 'Gross Income Multiplier'

A rough measure of the value of an investment property that is obtained by dividing the property's sale price by its gross annual rental income. GIM is used in valuing commercial real estate, such as shopping centers and apartment complexes, but is limited in that it does not consider the cost of factors such as utilities, taxes, maintenance and vacancies. Other, more detailed methods commonly used to value commercial properties include capitalization rate (cap rate) and the discounted cash flow method.







INVESTOPEDIA EXPLAINS 'Gross Income Multiplier'

The gross income multiplier can be used to roughly determine whether the asking price of a property is a good deal. Multiplying the GIM by the property's gross annual income yields the property's value, or what it should be selling for.

RELATED TERMS
  1. Builders Risk Coverage Form

    An insurance policy that covers residential and commercial structures ...
  2. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  3. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
  4. Real Estate Operating Company - ...

    A company that invests in real estate and whose shares trade ...
  5. Capitalization Rate

    A rate of return on a real estate investment property based on ...
  6. Cash Flow

    1. A revenue or expense stream that changes a cash account over ...
Related Articles
  1. How To Analyze Real Estate Investment ...
    Home & Auto

    How To Analyze Real Estate Investment ...

  2. Will Your Home Remodel Pay Off?
    Home & Auto

    Will Your Home Remodel Pay Off?

  3. Simple Ways To Invest In Real Estate
    Home & Auto

    Simple Ways To Invest In Real Estate

  4. Investing In New York City REITs
    Mutual Funds & ETFs

    Investing In New York City REITs

Hot Definitions
  1. Halloween Strategy

    An investment technique in which an investor sells stocks before May 1 and refrains from reinvesting in the stock market ...
  2. Halloween Massacre

    Canada's decision to tax all income trusts domiciled in Canada. In October 2006, Canada's minister of finance, Jim Flaherty, ...
  3. Zombies

    Companies that continue to operate even though they are insolvent or near bankruptcy. Zombies often become casualties to ...
  4. Witching Hour

    The last hour of stock trading between 3pm (when the bond market closes) and 4pm EST. Witching hour is typically controlled ...
  5. October Effect

    The theory that stocks tend to decline during the month of October. The October effect is considered mainly to be a psychological ...
  6. Repurchase Agreement - Repo

    A form of short-term borrowing for dealers in government securities.
Trading Center