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. Capitalization Rate

    A rate of return on a real estate investment property based on ...
  3. Real Estate Operating Company - ...

    A company that invests in real estate and whose shares trade ...
  4. Property Tax

    A tax assessed on real estate by the local government. The tax ...
  5. Cash Flow

    1. A revenue or expense stream that changes a cash account over ...
  6. Commercial Real Estate

    Property that is used solely for business purposes. Examples ...
Related Articles
  1. Home & Auto

    How To Analyze Real Estate Investment Trusts

    REITs are much like dividend-paying companies, but analyzing them requires consideration of the accounting treatment of property.
  2. Home & Auto

    Will Your Home Remodel Pay Off?

    Some renovations will mean a bigger sale price on your home, while others will just cost you.
  3. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  4. Charts & Patterns

    Why These Are 2015's Most-Promising Bank Stocks

    Which bank stocks should offer the best bang for your buck in 2015? Possibly these, so read on.
  5. Fundamental Analysis

    Interested In Pharmaceutical Stocks? Try Novartis (ADR)

    Novartis AG, is the world's leading pharmaceutical company by sales. Here is a closer look at Novartis, and how its financials stack up.
  6. Options & Futures

    Give Yourself More Options With Real Estate Options

    Real estate options have many benefits, including a smaller initial capital requirement.
  7. Taxes

    Getting U.S. Tax Deductions On Foreign Real Estate

    If your home or second home is not in the United States, you can still get U.S. tax deductions. How many and what kind depends on whether you also rent it.
  8. Charts & Patterns

    Are These the 10 Best Oil Stocks of 2015?

    Instead of trying to pick a bottom in oil, pick a good company. Here are 10 to consider.
  9. Chart Advisor

    Why This Real Estate ETF Should Be on Your Radar

    At current levels, real estate should be near the top of the list for most traders. Here's one ETF of REITs to pay particular attention to.
  10. Home & Auto

    Real Estate Face-Off: Zillow Vs. Trulia

    Both websites help you find homes for sale, but they organize the information differently. Here's how they compare.

You May Also Like

Hot Definitions
  1. Fixed Cost

    A cost that does not change with an increase or decrease in the amount of goods or services produced. Fixed costs are expenses ...
  2. Subsidy

    A benefit given by the government to groups or individuals usually in the form of a cash payment or tax reduction. The subsidy ...
  3. Sunk Cost

    A cost that has already been incurred and thus cannot be recovered. A sunk cost differs from other, future costs that a business ...
  4. Technical Skills

    1. The knowledge and abilities needed to accomplish mathematical, engineering, scientific or computer-related duties, as ...
  5. Prepaid Expense

    A type of asset that arises on a balance sheet as a result of business making payments for goods and services to be received ...
  6. Gordon Growth Model

    A model for determining the intrinsic value of a stock, based on a future series of dividends that grow at a constant rate. ...
Trading Center