net income multiplier - an informal valuation guideline used in multifamily property pricing. It is a market-derived factor arrived at by dividing the net income of recently sold similar properties into their respective selling prices. That factor is then used as a multiplier to estimate the value of other properties. As a general example, if the average net income of similar triplexes in a given neighborhood is approximately $40,000 annually, and several triplexes have sold recently for $400,000, the indicated net income multiplier would be 10 ($400,000 ¸ $40,000). As a general guideline, other triplexes similar to those recently sold in the same neighborhood would also be priced at 10 times the net income. See also gross income multiplier.

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