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Price to Rent Ratio Formula

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Price to Rent Ratio is a real estate metric used to compare the relative affordability of buying versus renting a property. Check FAQs

PTRR = \frac{MHP}{MAR}

PTRR - Price to Rent Ratio?MHP - Median Home Price?MAR - Median Annual Rent?

Price to Rent Ratio Example

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Here is how the Price to Rent Ratio equation looks like with Values.

Here is how the Price to Rent Ratio equation looks like with Units.

Here is how the Price to Rent Ratio equation looks like.

16.6667 = \frac{2.7E+6}{162000}

16.6667 = \frac{2.7E+6}{162000}

16.6667 = \frac{2.7E+6}{162000}

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Price to Rent Ratio Solution

Follow our step by step solution on how to calculate Price to Rent Ratio?

FIRST Step Consider the formula

PTRR = \frac{MHP}{MAR}

Next Step Substitute values of Variables

∴

PTRR = \frac{2.7E+6}{162000}

Next Step Prepare to Evaluate

∴

PTRR = \frac{2.7E+6}{162000}

Next Step Evaluate

∴

PTRR = 16.6666666666667

LAST Step Rounding Answer

∴

PTRR = 16.6667

Price to Rent Ratio Formula Elements

Variables

Price to Rent Ratio

Price to Rent Ratio is a real estate metric used to compare the relative affordability of buying versus renting a property.

Symbol: PTRR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Price to Rent Ratio

Median Home Price

Median Home Price is the middle value of all home prices in a given area, with half of the homes priced below and half priced above this value.

Symbol: MHP

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Median Home Price

Median Annual Rent

Median Annual Rent is the middle value of all rent prices in a given area over a year, with half of the rental properties priced below and half priced above this value.

Symbol: MAR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Median Annual Rent

Other formulas in Important Formulas of Mortgage and Real Estate category

Go Monthly Mortgage Payment

p = \frac{MA \cdot R \cdot {(1 + R)}^{n}}{{(1 + R)}^{n} - 1}

Go Debt Ratio

DR = \frac{TD}{TA}

Go Rental Yield

RY = (\frac{ARI}{PV}) \cdot 100

Go Price per Square Foot

P sqf = \frac{PSP}{T sqf}

How to Evaluate Price to Rent Ratio?

Price to Rent Ratio evaluator uses Price to Rent Ratio = Median Home Price/Median Annual Rent to evaluate the Price to Rent Ratio, The Price to Rent Ratio is a real estate metric used to compare the relative affordability of buying versus renting a property, calculated by dividing the property's purchase price by its annual rental income. Price to Rent Ratio is denoted by PTRR symbol.

How to evaluate Price to Rent Ratio using this online evaluator? To use this online evaluator for Price to Rent Ratio, enter Median Home Price (MHP) & Median Annual Rent (MAR) and hit the calculate button.

FAQs on Price to Rent Ratio

What is the formula to find Price to Rent Ratio?

The formula of Price to Rent Ratio is expressed as Price to Rent Ratio = Median Home Price/Median Annual Rent. Here is an example- 16.66667 = 2700000/162000.

How to calculate Price to Rent Ratio?

With Median Home Price (MHP) & Median Annual Rent (MAR) we can find Price to Rent Ratio using the formula - Price to Rent Ratio = Median Home Price/Median Annual Rent.

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Price to Rent Ratio Formula

Price to Rent Ratio Example

Price to Rent Ratio Solution

Price to Rent Ratio Formula Elements

Other formulas in Important Formulas of Mortgage and Real Estate category

How to Evaluate Price to Rent Ratio?

FAQs on Price to Rent Ratio

Variable Name