A property sold for $150,000 with gross annual rental income of $7,500. What is the indicated Gross Income Multiplier (GIM)?

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Multiple Choice

A property sold for $150,000 with gross annual rental income of $7,500. What is the indicated Gross Income Multiplier (GIM)?

Explanation:
The key idea is that the Gross Income Multiplier (GIM) is found by dividing the sale price by the gross annual rental income. So, take 150,000 and divide by 7,500, which equals 20. This means the property price is 20 times its annual gross rent. Remember, GIM is a quick screening tool that uses gross income only and doesn’t account for expenses or vacancies, unlike measures that use net income.

The key idea is that the Gross Income Multiplier (GIM) is found by dividing the sale price by the gross annual rental income. So, take 150,000 and divide by 7,500, which equals 20. This means the property price is 20 times its annual gross rent. Remember, GIM is a quick screening tool that uses gross income only and doesn’t account for expenses or vacancies, unlike measures that use net income.

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