The Gross Income Multiplier is derived by dividing what two figures?

The Gross Income Multiplier (GIM) is a metric used in real estate to assess an investment property's value based on its income-generating potential. This multiplier is calculated by taking the sale price of a property and dividing it by its gross annual income. This relationship provides a simple way for investors to compare different properties and evaluate their investment returns.

When an investor knows both the sale price and the gross annual income, they can derive the GIM, which can be useful for quick assessments or comparisons between similar properties. A higher GIM might suggest a property is overvalued relative to its income, while a lower GIM could indicate a better investment opportunity.

The other options provided do not correctly represent the definition of the Gross Income Multiplier. The choice specifying the price of a comparable property instead of the actual sale price of the property being analyzed would not yield accurate or relevant information for calculating GIM. Similarly, appraised value and expenses, or market value and cash flow, differ significantly from the GIM concept, as they involve other valuation methods and financial metrics rather than focusing solely on the income aspect relative to sale price.