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How to use
- Enter Property price.
- Enter Comparable monthly rent.
- Calculate, then review what is included in the definition before making a financial decision.
How it is calculated
Price-to-rent = property price ÷ (monthly rent × 12)
Example
A price of 900,000 versus 5,000 monthly rent means 60,000 annual rent and a price-to-rent ratio of 15×.
Important notes
This compares price with rent before expenses, financing and taxes. It is not a stand-alone buy-versus-rent decision.
Worked examples and interpreting results
| Case | Calculation | Result |
|---|---|---|
| Annual rent | 5000 × 12 | 60,000 |
| Ratio | 900000 ÷ 60000 | 15 |
Frequently asked questions
Does a low ratio always mean buying is better?
No. Expenses, financing, holding period, alternative returns and price changes can alter the outcome.
Is this a loan approval or credit decision?
No. This is a numerical calculator only; lenders may use different income, debt, appraisal and fee policies.
Should I use gross or net income?
Use the income type named by the field. Do not substitute net for gross because it changes the denominator and result.