Why use GRM instead of cap rate?

GRM is faster — no need to estimate operating expenses. For a 30-second screen of a Centris listing, GRM is enough to filter the obvious mismatches. For an offer, switch to cap rate.

Is a low GRM always better?

Not always. Low GRM can mean cheap property OR rent-controlled units OR a building in poor condition. Pair GRM with neighbourhood knowledge and a quick condition assessment before getting excited.

What's the relationship between GRM and cap rate?

Roughly: cap rate ≈ (1 − expense ratio) ÷ GRM. With a 35% expense ratio, a GRM of 15× translates to a cap rate of about (1 − 0.35) ÷ 15 = 4.3%. Eyeball it from one to the other.

Should I use net rent (after vacancy) for GRM?

No — by convention GRM uses gross rent. If you want vacancy-adjusted, you're really computing an "effective gross rent multiplier" which isn't the standard term. Stick with gross rent for comparability.

GRM · Quick screen

Price-to-rent, in 5 seconds.

GRM is the simplest screening metric on a rental: purchase price ÷ annual gross rent. Lower means cheaper for the rent. Useful as a 30-second pass before doing the cap rate / cash-on-cash work.

Assumptions

Purchase price

Annual gross rent

Sum monthly rent × 12 across all units.

Results

GRM

14.32×

Implied monthly rent$3,200

Foncier the whole deal

This number is one of seventy.

Cap rate is a start. The full Foncier analyzer adds DSCR, IRR, ten-year cashflow projections, scenarios, side-by-side compare, and live community rent comps — for free, on your first three deals.

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How this is calculated

GRM = purchase price ÷ annual gross rent. Quebec small multi-family typically trades at 12–18×. Toronto + Vancouver routinely > 25×. The lower the GRM, the cheaper the property is relative to rent — but GRM ignores expenses, so a low number isn't automatically a good deal.

Worked examples

GRM at typical Quebec prices.

Sherbrooke duplex

GRM 11.4×

$320,000 duplex, $28,000 annual gross rent. GRM 11.4× — typical for secondary Quebec markets.

Price$320,000

Rent$28,000

GRM11.4×

MarketCheap

Plateau triplex

GRM 17.3×

$725,000 triplex, $42,000 annual gross rent. GRM 17.3× — Montréal Plateau pricing premium.

Price$725,000

Rent$42,000

GRM17.3×

MarketTight

GRM questions

About gross rent multiplier.

Quebec small multi-family typically: 11–14× in secondary cities, 14–18× in Montréal, can hit 20×+ in tight Plateau / Mile End submarkets. Toronto + Vancouver often 25×+. Lower = cheaper per dollar of rent.

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