The
price to rental ratio
is a metric that helps assess whether it is more financially advantageous to buy or rent a property.
It is calculated by dividing the average home price by the annual rent of a similar property.
If the ratio is below 15, it’s a sign to sell the property. If the ratio is above 21, it’s a sign to rent the property. If the ratio is in between these two, it’s a sign to buy the property.
For example, if a property costs Rs 50,00,000 lakhs and annual rent for similar property is Rs 2,00,000.
Price to rent ratio = 50,00,000/2,00,000 = 25
In this case, it is better to rent out the property.
The price-to-rent ratio can vary significantly across different cities and regions in India. It is influenced by factors such as real estate prices, rental rates, and local market conditions.
Remember that the price-to-rent ratio is just one factor to consider when making a decision to buy or rent a property.
Other factors such as your financial situation, long-term plans, and local market dynamics also play a crucial role. They help in making a well-informed decision regarding homeownership. This is all about
property value to rent ratio.
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What is Price to Rent Ratio?
Shristi Pandey
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1 Year
2024-01-02T16:25:59+00:00 2024-01-03T10:53:29+00:00Comment
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