Properties A, B, and C recently sold for $3,500,000, $4,050,000, and $5,000,000, respectively. The gross rents from each were $412,000 for Property A, $450,000 for Property B, and $526,000 from Property C. What is the gross income multiplier you would use based on these sales?

Properties A, B, and C recently sold for $3,500,000, $4,050,000, and $5,000,000, respectively. The gross rents from each were $412,000 for Property A, $450,000 for Property B, and $526,000 from Property C. What is the gross income multiplier you would use based on these sales?

• A. 8.5
• B. 9.4
• C. 9.2
• D. 9.0

Answer: (D)

The gross income multiplier is found by dividing a property's sale price by its gross annual income (rents). When you have several sales, you average those multipliers to get a representative GIM to apply. Compute each: - 3,500,000 / 412,000 ≈ 8.50 - 4,050,000 / 450,000 = 9.00 - 5,000,000 / 526,000 ≈ 9.50 Average these: (8.50 + 9.00 + 9.50) / 3 = 27.00 / 3 = 9.00. Using these sales, the gross income multiplier to use is about 9.0.

The gross income multiplier is found by dividing a property's sale price by its gross annual income (rents). When you have several sales, you average those multipliers to get a representative GIM to apply.

Compute each:

• 3,500,000 / 412,000 ≈ 8.50

• 4,050,000 / 450,000 = 9.00

• 5,000,000 / 526,000 ≈ 9.50

Average these: (8.50 + 9.00 + 9.50) / 3 = 27.00 / 3 = 9.00.

Using these sales, the gross income multiplier to use is about 9.0.