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net income by the sales price to arrive at an over-all rate <br /> of return. The net income of the subject property is then <br /> divided by the appropriate overall rate to provide an <br /> indication of value. <br /> GROSS INCOME MULTIPLIER (GIM) METHOD <br /> When certain specific types of income properties are rented <br /> in any significant number in the market, there is a strong <br /> tendency for the ratio between sales prices and gross <br /> incomes to be fairly consistent. The Gross Income Multiplier, <br /> commonly referred to as GIM, is a factor reflecting this <br /> relationship between the gross annual income and value. <br /> Once the GIM has been determined for a specific type <br /> property, it can then be applied against the gross income of <br /> other similar properties to indicate their economic value. <br /> The GIM approach is often under appreciated, though the <br /> appraiser, as with any income approach, must still give <br /> consideration to age of building, size, location and land to <br /> building ratios. Many adjustments which would normally <br /> involve judgment estimates, have been resolved by the free <br /> action of the rental market. For example, if one property <br /> has some advantage, such as location or accessibility over <br /> another property, this difference would probably be <br /> reflected in the rental. <br /> The GIM may be applied to either the gross income or to the <br /> effective gross income (EGIM) , depending on <br /> the circumstances and available data in the local market. <br /> This approach is frequently applicable to apartment, rental <br /> And certain types of industrial properties, where a <br /> relatively consistent net-to-gross income operating ratio <br /> exists. <br />