What is the formula to compute the Gross Income Multiplier (GIM)?

The Gross Income Multiplier (GIM) is an important measure in real estate appraisal, specifically for income-producing properties. It is calculated by dividing the market value (MV) of the property by its gross income (GI). This relationship defines how many times the gross income can be multiplied to reach the market value, providing investors with a quick way to assess property values based on income generation.

The correct formulation for GIM is derived from the equation that states that the market value is equal to the gross income multiplied by the GIM. Hence, the formula MV = GI × GIM effectively captures this relationship. In simpler terms, for any given property, if you know its gross income and the GIM, you can easily calculate the market value.

In this context, choices that either suggest a different mathematical relationship or misrepresent the variables don’t accurately describe the GIM's operational mechanics. Only the relationship of multiplying the gross income by the GIM to ascertain the market value holds true in standard appraisal practice.