What Is a Good Gross Rent Multiplier (GRM)? Formula and Canadian City Benchmarks

The gross rent multiplier (GRM) is the ratio of a rental property’s price to its gross annual rent. It tells you how many years of rent, before any expenses, it would take to equal the purchase price. A GRM of 12 means the price is 12 times the yearly rent.

GRM = Purchase price ÷ Gross annual rent

For an 8-unit building priced at $1,950,000, with every unit renting at $1,750 a month, gross annual rent is 8 × $1,750 × 12 = $168,000. The GRM is $1,950,000 ÷ $168,000 = 11.6.

GRM is popular because it needs only two numbers that are in almost every listing: the price and the rent. You can calculate it in your head while scrolling listings, long before you have the tax bill or a list of utility costs.

A good gross rent multiplier is a low one for your city. Implied by CBRE’s Q2 2026 cap rates, multiplex GRMs are about 12 in Calgary, 14 in Toronto and 15 in Montréal and Vancouver. There is no single Canadian number, because GRMs vary widely by city and building type. Markets with low cap rates, such as Vancouver, Toronto and Montréal, have high GRMs; markets with higher cap rates, such as Calgary, have lower ones. The next section breaks it down by city.

Rules of thumb such as “under 10 is good” come from markets and eras with higher cap rates. Applied to a city where buildings trade at a 4.5% cap rate, they would rule out almost every listing. A better approach is to work out the GRM of recent sales of similar buildings nearby and compare against that.

A low GRM is not automatically a bargain. It can mean high expenses, an older building that needs work, weak demand or rents that are unusually high and may not last. Always ask why a building is cheaper per dollar of rent than its neighbours.

GRM climbs as cap rates fall: the cities where buyers accept the lowest cap rates, Vancouver, Toronto and Montréal, have multiples around 14 to 15, while Calgary sits near 12. Buyers pay more per dollar of rent where land and demand are more expensive.

Brokers rarely publish GRM, so these figures are derived, not observed sale data. They take CBRE’s Q2 2026 cap rate range for low-rise Class B apartments (the closest category to a multiplex) and convert it with a simple relationship: GRM ≈ NOI as a share of gross rent ÷ cap rate. We use 63.7%, the ratio from our 8-unit example (NOI of $107,040 on $168,000 of gross rent). CBRE’s survey skews to larger, institutional-quality buildings, so small multiplexes can trade at different multiples. Data as of Q2 2026; we recalculate when CBRE publishes each quarter.

What that means in dollars: a building with the same $168,000 of rent would price at roughly $2.03 million at Calgary’s midpoint, $2.30 million in Toronto, $2.45 million in Montréal and $2.52 million in Vancouver. That is about $490,000 more in Vancouver for identical rent.

Treat these as a guide, not a quote. The 63.7% assumption matters. If a building keeps only 55% of its rent as NOI (heat included in rent, older plant, high taxes), every GRM above drops by about 14%; at 70% it rises by about 10%. Calgary’s range then runs from 10.0 to 14.0 on the same cap rates. A building’s own expenses move its GRM more than the city does at the edges, so always compare against recent sales of similar buildings.

In Toronto, a multiplex GRM of about 12 to 15 is implied by CBRE’s Q2 2026 cap rates, with roughly 14 at the midpoint, and anything under 12 is a deal worth checking. CBRE’s low-rise Class B cap rates of 4.15% to 5.15% convert to a GRM of 12.4 to 15.3 at a 63.7% NOI-to-rent ratio.

The width of the range is the point. The low end is typically a building with below-market rents, a suburban location or work needed. The high end is a well-located building where buyers pay up for rent-growth potential. A $2.3 million Toronto 8-plex at $168,000 of rent has a GRM of 13.7, in line with the market. At $2.7 million it has a GRM of 16.1, and the price has to be justified by something the rent roll doesn’t yet show.

In Vancouver, a multiplex GRM of 13 to 17 is implied, the highest of the four cities, and a GRM near 13 is the bargain end of the range. CBRE’s Q2 2026 cap rates of 3.75% to 4.75% imply 13.4 to 17.0 at a 63.7% NOI-to-rent ratio, with a midpoint of about 15.

Because the multiple is already high, the gap between a fair price and a stretch is wide: at $168,000 of rent, 13.4 is $2.25 million and 17.0 is $2.86 million, a difference of over $600,000. Vancouver buyers are underwriting land value and long-term rent growth as much as today’s income, so DSCR often decides the offer. At a 15 GRM (a 4.25% cap rate), the NOI covers only about 0.8 times the payments on a 75% loan at 4.9% over 25 years, so expect a larger down payment than the bank’s loan-to-value limit suggests. Check it against the DSCR math.

In Calgary, a multiplex GRM of about 11.6 to 12.7 is implied, the lowest of the four cities, and a GRM under 11.5 deserves a closer look. CBRE’s Q2 2026 cap rates of 5.00% to 5.50% imply a GRM of 11.6 to 12.7, with a midpoint near 12.

Calgary’s lower multiple comes with a trade-off: income, not appreciation, is the pitch, so the rent roll has to be solid. According to Yardi data reported by REMI Network, Calgary ended Q2 2026 with the highest average rental vacancy of the major markets, at 6.8%, and was the only one to record a year-over-year drop in average rent. A low GRM based on rents that are softening is cheaper on paper than in practice, so underwrite with a higher vacancy allowance than you would in Vancouver, where the same data showed 4.2%.

In Montréal, a multiplex GRM of about 14 to 15 is implied by CBRE’s Q2 2026 cap rates, close to Vancouver’s. CBRE’s Q2 2026 cap rates of 4.25% to 4.50% are a narrow band, and they convert to a GRM of 14.2 to 15.0.

Most Montréal plexes are two to five units and are priced off local sold comparables, so check any multiple against recent Centris sales before you rely on it. Two cautions apply. Where the owner pays for heat, or taxes are high relative to rent, the NOI-to-rent ratio falls, so a GRM of 14 can mean a thinner cap rate than it would elsewhere. And if in-place rents lag the market, today’s GRM overstates what you are really paying. Confirm both from the leases and the actual bills.

GRM is usually calculated on annual rent in Canada, but some sources, especially American ones, use monthly rent instead. The method is the same; only the scale changes. The 8-unit building’s monthly GRM is $1,950,000 ÷ $14,000 = 139.3, which is simply the annual GRM of 11.6 multiplied by 12.

Check which version a source uses before comparing numbers. A “GRM of 120” is cheap on a monthly basis (10 on an annual basis), but would be absurdly expensive if read as annual.

You will also see the gross income multiplier (GIM). It works the same way but includes other income such as parking, laundry and storage in the denominator, not just rent. Appraisers sometimes use effective gross income (after vacancy) instead of potential rent. Whichever version you use, use it consistently across every property you compare.

If similar buildings in an area sell at a known GRM, multiplying a property’s rent by that GRM gives a quick estimate of its value. This is a simplified form of the income approach that appraisers use for small rental properties.

Estimated value = Gross annual rent × Market GRM

If recent sales of comparable 6–10 unit buildings nearby averaged a GRM of 12, the 8-unit building’s $168,000 of rent suggests a value of about $2,016,000. At an asking price of $1,950,000, it looks slightly cheaper than its neighbours.

The estimate is only as good as the comparables. They should be similar in size, age, location and, most importantly, in who pays which expenses. A sale where tenants pay their own heat is not comparable to one where the owner pays it, even if the rents look alike. The next section shows why.

GRM ignores vacancy and operating expenses, so two buildings with the same price and rent can be worth very different amounts. Imagine a second 8-unit building, also priced at $1,950,000 with $168,000 of rent, but the owner pays heat and its expenses are $70,000 instead of $55,920.

The GRM is identical, but Building B is worth about $256,000 less on its income. GRM also ignores below-market rents, deferred maintenance and property tax differences between cities. Use it to decide which listings deserve a closer look, then switch to net operating income and cap rate.

GRM equals the share of rent that becomes NOI divided by the cap rate, so GRM and cap rate move in opposite directions. A building that keeps a larger share of its rent as NOI can justify a higher GRM at the same cap rate.

GRM = (NOI ÷ Gross annual rent) ÷ Cap rate

Building A keeps 63.7% of its gross rent as NOI. At that margin, here is the GRM that matches each cap rate:

This gives you a way to translate. If you know the cap rates buildings trade at in your city and roughly what share of rent your building keeps, you can work out the GRM a fair price implies. For more on cap rate, see cap rate vs. cash-on-cash return.

Multiplying an annual rent increase by the GRM gives a quick, conservative estimate of how much value it adds. This is useful when deciding whether a unit renovation pays for itself.

Say you plan to refresh two units at $8,000 each when they turn over and raise their rent from $1,750 to $1,950. That is $200 × 2 × 12 = $4,800 a year of extra rent. At the building’s GRM of 11.6, that adds about $55,700 of value, or $39,700 after the $16,000 cost.

The GRM method is conservative because it assumes expenses rise in step with rent. A higher rent usually adds little cost, so the NOI method gives more: $4,464 of added NOI at a 5.49% cap rate is about $81,300. Treat the GRM figure as a floor and the cap rate figure as closer to what a buyer would pay. Where rent control applies, as in British Columbia and for most older units in Ontario, increases for sitting tenants are capped, so plan them around turnover.

PropStack’s rent optimization tool lets you set a target rent and an optimization cost for each unit, then shows the monthly uplift, annual uplift and net value added using GRM. You choose which units to include, and the plan summary updates the total cost, net upside and new property value as you go.

Every deal also shows NOI, cap rate, cash-on-cash return and DSCR, so you can check the full picture once a listing passes the GRM screen. Try it on a listing, no account needed.