Free Price-to-Rent Ratio Calculator
Compare the cost of buying versus renting by dividing the property price by annual rent to assess market conditions.
USD
USD
Price-to-Rent Ratio
15.2
Annual Rent$26,400
Rent as % of Price6.60%
Price-to-Rent Ratio vs Comparable Monthly Rent
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
Example Calculation
A home costs $400,000 to buy, while comparable rentals cost $2,200 per month.
- 01Annual rent: $2,200 x 12 = $26,400
- 02Price-to-rent ratio: $400,000 / $26,400 = 15.2
- 03Rent as % of price: $26,400 / $400,000 x 100 = 6.60%
- 04A ratio of 15.2 is in the neutral zone, slightly favoring buying