Property metric comparison.

Cap Rate and GRM measure property value differently. GRM = price / annual gross rent (uses gross rent only). Cap Rate = NOI / property price (uses net operating income after expenses). GRM ignores expenses entirely; Cap Rate captures full operating economics. Use both for proper deal analysis.

Example: 400k property, 24k annual gross rent, 10k operating expenses (taxes, insurance, maintenance, management). GRM = 16.67. NOI = 14k. Cap rate = 3.5%. The same property looks different through each lens. GRM might attract attention; Cap Rate reveals lower-than-market returns due to high expenses.

Why both metrics matter: GRM screens deals quickly (just need price and rent). Cap Rate gives true unleveraged yield once you have expense data. Properties with same GRM but different expense profiles have very different actual returns. 400k property with 30% expense ratio outperforms same-priced property with 50% expense ratio - despite identical GRM.

Run it with sensible defaults

Using property price of 400,000, annual gross rent of 24,000, annual operating expenses of 10,000, the calculation works out to 16.67x / 3.50%. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Property Price, Annual Gross Rent, and Annual Operating Expenses — do not pull with equal force. Two inputs usually tip the answer one way or the other. Identify which ones matter most by flipping each value past a round threshold and watching whether the winning option changes.

How the math works

GRM = price / gross rent. Cap rate = NOI / price (NOI = gross rent - operating expenses). The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

Using this well

Treat the output as one point on a wider map. Run it three times — a pessimistic case, a central case, and a stretch case — and plan against the pessimistic one. That habit alone separates people who stick with an investment plan from those who bail at the first wobble.

What this doesn't capture

Steady-rate math ignores real-world volatility. Actual returns are lumpy; sequence-of-returns risk matters most in drawdown; fees and taxes drag on compound growth; and behaviour changes in drawdowns can reduce outcomes below the projection. Treat the number as one scenario, not a forecast.