How is this calculated?

The Residential Proforma spreadsheet calculates total expenses and revenues based on the inputs you provide. This includes costs such as property price, maintenance, taxes, and potential rental income.

The Gross Rent Multiplier (GRM) is calculated by dividing the property price by the annual rental income. A high GRM implies that a property will take longer to turn a profit, hence investors usually look for a lower GRM.

The Net Operating Income (NOI) is calculated by subtracting the total operating expenses from the total potential income.

The capitalization rate, or cap rate, is calculated by dividing the NOI by the property's market value. This rate gives investors an estimate of potential return on the investment.