Enter the total home price and the average monthly rent into the calculator to determine the price-to-rent ratio.

## Price-to-Rent Ratio

The following formula is used to calculate a price-to-rent ratio.

P:R = HP / R*12

- Where HP is the total sale or home price ($)
- R is the monthly average rent ($)

To calculate the price-to-rent ratio, divide the total sale price by 12 times the monthly rent.

## Price-to-Rent Ratio

A price-to-rent ratio is a proportion of the total home price to the annual rent that could be generated from the home. The lower the ratio the better it is to buy a home. The average P-R Ratio is 16-20.

## Price-to-Rent Ratio Example

How to calculate price-to-rent ratio?

**First, determine the median home price.**Calculate the median or mean home price of the area.

**Next, determine the average monthly rent.**Calculate the average monthly rent for the area.

**Finally, calculate the price-to-rent ratio.**Calculate the price-to-rent ratio.

## FAQ

**What is a good price to rent ratio?**

On an average price to rent ratios linger around 16-20. Anything lower suggests that rent is high in the area and anything higher suggests rent is low.