At Republic Investment Group, we understand that investing in real estate may seem like a complicated process, especially if you’re new to it. Our company strives to empower you to take a more active role in your wealth maximization strategies. We do so by providing you with the information you need to succeed.
How to Invest With Republic Investment Group
We’ve broken down the typical steps you would take when you invest in real estate with us.
The real estate industry uses terms that may be unfamiliar to you. To help our clients, we’ve provided a short glossary of some of these terms as well as explanations of key concepts. If you need further assistance, please don’t hesitate to get in touch.
The Gross Rent Multiplier (GRM) is a valuation approach used in the commercial real estate industry. It calculates the approximate value of income that a property produces based on its gross rental income. Simply put, it is an estimate of how much money your property will make and how long you need to wait until your property pays for itself.
Gross rental income includes income derived not just from rent, but also the money you earn from the property in other ways. Some examples are parking fees and vending machine profits. Gross rental income does not include property taxes, utilities, insurance, and other expenses.
To calculate GRM, simply divide the property’s annual gross rental income by its purchase price. So if the property costs $150,000 and its gross rental income for one year is $40,000, the equation will look like this:
$150,000 / $16,800 = 8.9 GRM
Like golf scores, the lower the GRM, the better. Your findings will come in handy when you’re comparing potential investment properties.