Price to Rent Ratio Calculator: Buy vs Rent at a Glance
Work out the price-to-rent ratio of a home — the headline market metric that flags whether a neighborhood favors buying, renting, or sits in between.
Adjust the inputs and select Calculate for a full breakdown.
Compare Common Scenarios
How the numbers shift across typical situations for this calculator:
| Scenario | Years of rent per home price |
|---|---|
| $400k home · $24k/yr rent | $16.67 |
| $250k · $20k/yr rent | $12.50 |
| $1.2M · $42k/yr rent | $28.57 |
| $180k · $14k/yr rent | $12.86 |
How This Calculator Works
Enter the home price and the annual rent for the same property (or a close comparable). The calculator divides one by the other to give the price-to-rent ratio — read as 'years of rent equivalent to the purchase price'.
The Formula
Cost per Unit
Total Amount is the full cost or price, Quantity is the number of units it covers
Worked Example
A $400,000 home renting for $24,000 a year has a price-to-rent ratio of 16.67. The common rules of thumb: under 15 favors buying; 15 to 20 is the gray zone; above 20 favors renting on cost alone (San Francisco, Manhattan, Honolulu, and many other coastal metros routinely sit above 25).
Key Insight
The price-to-rent ratio is a useful first cut but ignores three things the full buy-vs-rent decision needs: mortgage rate, property tax, and price appreciation. In low-rate, low-tax, fast-appreciating markets, buying can win at higher ratios than the rule suggests. In high-tax, high-rate, slow-appreciating markets, renting wins at lower ratios. Treat the ratio as a screening tool, not a verdict.
Frequently Asked Questions
How is price-to-rent ratio calculated?
Divide home price by annual rent for the same property. A $400,000 home renting for $24,000 a year has a price-to-rent ratio of 16.67.
What is a good price-to-rent ratio?
Under 15 favors buying; 15 to 20 is the gray zone; above 20 favors renting on cost alone. These are starting rules, not verdicts — mortgage rates and tax structure matter too.
Where do US markets sit?
Midwest and Sun Belt metros often run 10 to 18 (buy-friendly). West Coast and Northeast metros often run 20 to 35 (rent-friendly on this metric). The national average has historically sat around 18 to 20.
Does this account for mortgage rate?
No. The ratio is a market metric independent of financing. In low-rate environments, the breakeven ratio above which renting wins can be much higher; high-rate environments push it lower.
Should I use gross or net rent?
Gross rent (what the tenant pays). Comparing gross rent against price is the standard market metric. Net rent (after operating expenses) is the input for cap rate, which serves a different purpose.
Related Calculators
Data Sources & Benchmarks
This calculator draws on 1 independent, dated source.
Methodology & Review
Price-to-rent ratio is home price divided by annual rent. Use comparable rent for the specific property (or close comparables) on the same basis as the price. The ratio is a market-level rule of thumb — it ignores mortgage rates, property tax, maintenance, and appreciation, all of which the full buy-vs-rent decision needs.
Written by Ugo Candido · Last updated May 17, 2026.