What is the proper method for determining the gross income multiplier?

The gross income multiplier (GIM) is a valuable tool used in real estate valuation to assess the relationship between the sales price of a property and its gross income. The proper method for determining the GIM is to divide the sales price by the gross income. This calculation provides a multiplier that indicates how many times the gross income can be multiplied to arrive at the sales price, thus allowing investors to quickly evaluate the investment potential of income-generating properties.

Using this method helps in comparative analyses of various properties based on their income-generating capabilities, making it easier to make informed purchasing or investment decisions in the real estate market. The GIM can effectively highlight the value of properties based on their income, providing a straightforward metric for comparison.

The other choices do not correctly represent the process of finding the gross income multiplier and instead lead to unrelated calculations that do not serve the same purpose in property valuation.