Why would an appraiser use gross income multiplier instead of gross rent multiplier?

An appraiser would use the gross income multiplier (GIM) instead of the gross rent multiplier (GRM) when the property has income from sources other than just rental income. The gross income multiplier takes into account the total income generated by the property, which may include revenue streams such as parking fees, laundry facilities, vending machines, or other ancillary services. This broader perspective allows the appraiser to assess the full potential income-producing ability of a property.

Using gross rent multiplier alone would limit the analysis strictly to rental income, which would not provide a complete picture of a multi-income property’s financial performance. Thus, when an appraiser recognizes multiple income sources, the gross income multiplier becomes the more appropriate tool for valuing the property accurately.