Enter the purchase price of a property and the expected monthly rent into the calculator to determine the rent to value ratio.
- All Rent Calculators
- All Personal Finance Calculators
- Price-to-Rent Ratio Calculator
- Rent Vs Sell Calculator
- Rent Per Sq Ft Calculator
- Square Foot Rent Calculator
- Percentage Rent Calculator
Rent To Value Formula
The following formula is used to calculate a rent to value ratio.
RTV = MR / P *100
- Where RTV is the rent to value ratio (%)
- MR is the expected monthly rent
- P is the purchase price of the home or building
To calculate a rent to value ratio, divide the monthly rent by the purchase price of the home, then multiply by 100.
| Monthly Rent ($) | Purchase Price ($) | Rent to Value (%) |
|---|---|---|
| 800 | 100,000 | 0.80 |
| 900 | 120,000 | 0.75 |
| 1,000 | 150,000 | 0.67 |
| 1,200 | 150,000 | 0.80 |
| 1,200 | 180,000 | 0.67 |
| 1,300 | 160,000 | 0.81 |
| 1,400 | 175,000 | 0.80 |
| 1,500 | 200,000 | 0.75 |
| 1,600 | 200,000 | 0.80 |
| 1,800 | 220,000 | 0.82 |
| 1,800 | 250,000 | 0.72 |
| 2,000 | 250,000 | 0.80 |
| 2,200 | 275,000 | 0.80 |
| 2,400 | 300,000 | 0.80 |
| 2,500 | 350,000 | 0.71 |
| 2,800 | 350,000 | 0.80 |
| 3,000 | 375,000 | 0.80 |
| 3,200 | 400,000 | 0.80 |
| 3,500 | 450,000 | 0.78 |
| 4,000 | 500,000 | 0.80 |
| Formula: Rent to Value (%) = (Monthly Rent / Purchase Price) × 100. Example: $1,500 on $200,000 = 0.75%. | ||
Rent to Value Definition
Rent to value is defined as the percentage of the ratio of the monthly rent to the purchase price of a home. This ratio is typically referred to as the opposite of the price to rent ratio.
Rent To Value Example
How to calculate a rent to value?
- First, determine the monthly rent.
Estimate the expected monthly rent you will charge for the property.
- Next, determine the purchase price.
Determine the final purchase price, including fees, of the home.
- Finally, calculate the RTV.
Calculate the rent to value using the equation above.
FAQ
Typically anything above 2% is a good ratio. This means the rental earnings will pay for the purchase price after just 50 months or roughly 4 years.
