A salesperson listing a 100% rented 6-plex without expenses uses:

Rationale

A salesperson listing a 100% rented 6-plex without expenses uses gross rent multiplier (GRM).

The gross rent multiplier (GRM) is a valuable tool for evaluating investment properties based solely on their gross rental income, making it ideal for a fully rented property without the need to account for expenses.

A (net rent multiplier (NRM).) YOUR ANSWER

The net rent multiplier (NRM) takes into account the net operating income, which requires knowledge of the property's expenses. Since the scenario specifies a listing without expenses, using NRM would not be applicable or beneficial for evaluating the 6-plex.

B (return on investment (ROI).) YOUR ANSWER

Return on investment (ROI) measures the profitability of an investment relative to its cost, factoring in both income and expenses. However, this metric is less useful in this context since it requires detailed expense information, which is not provided in the listing for the 6-plex.

C (gross rent multiplier (GRM).) CORRECT

The gross rent multiplier (GRM) is calculated by dividing the property's price by its gross rental income. It is particularly useful for properties like the 6-plex, as it efficiently evaluates potential income without needing to consider operational expenses, making it the appropriate choice.

D (gross income multiplier (GIM).) YOUR ANSWER

The gross income multiplier (GIM) is similar to the GRM but includes all income sources, not just rent. Since the question specifies a property that is entirely rented out, GIM is not the best fit as it may complicate the evaluation by introducing additional income considerations that are irrelevant in this case.

Conclusion

In summary, a gross rent multiplier (GRM) is the most suitable metric for a fully rented property like the 6-plex listed without expenses. It allows the salesperson to assess the property's value based solely on gross rental income, while alternatives like NRM, ROI, and GIM incorporate aspects that are not applicable or necessary in this context. Understanding these tools helps investors make informed decisions in real estate transactions.

A salesperson listing a 100% rented 6-plex without expenses uses:

A salesperson listing a 100% rented 6-plex without expenses uses gross rent multiplier (GRM).

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