Which multiplier is used to estimate a property's value based on its gross annual income?

The gross income multiplier is specifically used to estimate a property’s value based on its gross annual income. This metric assesses the potential income that can be generated from a property and translates that into an estimated market value.

To use the gross income multiplier, you would take the property’s gross annual income and multiply it by the gross income multiplier, which represents the relationship between the income generated and the value of properties within a particular market segment. It provides a straightforward method for investors or appraisers to quickly gauge the value of income-generating properties without needing detailed financial analysis.

In contrast, the gross rent multiplier specifically focuses on rental income rather than total income, which includes other sources such as leasing and additional services. The net income multiplier would take into account various expenses that affect net income, which is not what is considered with gross income. The capitalization rate is a different approach, calculating value based on net income and overall property performance rather than gross income.