denver rental market: Breaking Down the Price-to-Rent Ratio in Your Market
- 07/01/16 03:23 AM
Breaking Down the Price-to-Rent Ratio in Your Market The price-to-rent ratio is a measure of the relative affordability of renting and buying in a given housing market. It is calculated as the ratio of home prices to annual rental rates. So, for example, in a real estate market where, on average a home worth $200,000 could rent for $1,000 a month, the price-to-rent ratio is 16.67. That’s determined using the formula: $200,000 / (12x$1,000). It’s a useful statistic for comparing the relative costs of buying and renting across different markets, and it can be especially helpful when deciding whether to buy or to rent. (1 comments)