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14 Cards in this Set
- Front
- Back
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GRM: |
Gross rental multiplier (R in I/RV). It's a quick and dirty income calculation for SFH. Doesn't include vacancy. Sale Price (V)/Monthly rent (I). Should be 100 or less for good investment. GRM* montly rent=value. .G1160.7. |
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(GRM Rate)*(monthly rent aka income)= |
V aka value. Quick and dirty I/RV calculation, for SFH rents. G1160.7 |
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Sale price/monthly rent= |
GRM: gross monthly multiplier. G1160.7 |
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Full occupancy * full rent +other income= |
PGI: potential gross income. G1160.6 |
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PGI - vacancies & credit losses = |
EGI: effective gross income. G1160.6 |
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EGI - Total operating expenses = |
NOI: net operating income. G1160.6 |
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A risk factor plus cost of capital: |
CAP rate. G1160.6 |
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A Cap rate is simply a way to figure out _____ |
ROI, return on investment. G1160.6 |
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In addition to analyzing cap rates, investors also should consider ______ or they could have cash flow problems. |
down pmt amount, and cost of financing. G1160.6 |
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To calculate a cap rate, divide NOI by ________ |
Asking price. G1160.7 |
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What is the major drawback of using a GRM to evaluate rental properties? |
Doesn't take expenses or vacancies into account, but is easier to verify using rent rolls. Most investors use Cap rate instead. G1160.7 |
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What are the downsides to using a cap rate? |
a) expense #s can be manipulated b) harder to verify than using GRM c) harder to calculate than GRM |
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Gross income multiplier (GIM): |
Price/gross annual income. G1160.7 |
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GIM: |
Gross income multiplier. Price/gross annual income. Same as GRM but annualized and may include non-rent income. G1160.7 |
