Increase Value
vacant unit = Higher Value?
Higher rents increase the value of a property because rental income is a key factor in determining the property’s investment potential. The more rent a property generates, the higher its potential return on investment (ROI) for an owner or investor. This is especially true for income-generating properties, where higher rental income improves cash flow, making the property more attractive to buyers. Since property values are often calculated based on metrics like the Gross Rent Multiplier (GRM) or capitalization rate (cap rate), higher rents lead to a higher valuation of the property.
How to Use the Gross Multiple Calculator for Pricing a Property
As a listing agent, you can use this calculator to compare how the property performs based on current rents versus proforma (projected future) rents. This will help you determine how much you should list the property for, considering its potential value to investors. Use this calculator to balance between the property’s current value and its future potential.