If a property sells for 250,000 and its gross annual income is 10,000, what is the GIM?

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Multiple Choice

If a property sells for 250,000 and its gross annual income is 10,000, what is the GIM?

Explanation:
GIM is calculated by dividing the property's sale price by its gross annual income. It shows how many dollars of price you pay for each dollar of gross income. Here, 250,000 ÷ 10,000 = 25, so the gross income multiplier is 25. This quick measure helps compare similar income properties, but it ignores operating expenses and vacancies, so it’s a rough indicator. For a more precise valuation, you’d use net income and a capitalization rate.

GIM is calculated by dividing the property's sale price by its gross annual income. It shows how many dollars of price you pay for each dollar of gross income. Here, 250,000 ÷ 10,000 = 25, so the gross income multiplier is 25. This quick measure helps compare similar income properties, but it ignores operating expenses and vacancies, so it’s a rough indicator. For a more precise valuation, you’d use net income and a capitalization rate.

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