Lessons
- CFA Level 2: Alternative Assets – Introduction
- Real Estate: Types of Properties
- Real Estate Valuation: NPV & IRR Analysis
- Income Property Valuation Using Capitalization Rate
- Gross Income Multiplier (GIM) for Real Estate Comps
- Private Equity: Venture Capital, Leveraged Buyouts and Exit Strategies
- Private Equity Fund Structures
- Venture Capital and Leveraged Buyout Valuation
- About Hedge Funds: What You Need to Know
Gross Income Multiplier (GIM) for Real Estate Comps
The GIM can be used to compare properties or can be averaged across properties to determine a market GIM rate, which can then be applied to a property under investment consideration.
GIM = Purchase Price / Gross Annual Income
Because sale of income generating properties can be infrequent, it may be difficult to employ the GIM approach when performing a valuation. Further, truly comparable properties may not exist. Gross rental income is not necessarily better than net operating income, when valuing properties.
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