Price-to-Rent Ratio Rechner — Formel

Price-to-Rent Ratio Analysis

The price-to-rent ratio helps determine whether buying or renting is more favorable in a given market.

Formula

Price-to-Rent Ratio = Home Price / Annual Rent

Interpretation

  • Below 15: Buying is generally favorable
  • 15 to 20: Closer to neutral; depends on personal factors
  • Above 20: Renting may be more cost-effective
  • Above 25: Strongly favors renting over buying

    • Lösungsbeispiel

    A home costs $400,000 to buy, while comparable rentals cost $2,200 per month.

    1. Annual rent: $2,200 x 12 = $26,400
    2. Price-to-rent ratio: $400,000 / $26,400 = 15.2
    3. Rent as % of price: $26,400 / $400,000 x 100 = 6.60%
    4. A ratio of 15.2 is in the neutral zone, slightly favoring buying