CalculateRealEstateROI

Market Analysis

Should my tenants be buying instead of renting?

Watch price-to-rent ratio: under 15 favors buying; over 25 favors renting.

Reviewed by Keiron Brown, Founder & Editor, CalculateRealEstateROI · Educational estimates only — not investment, financial, tax, or legal advice

Direct answer

Watch price-to-rent ratio: under 15 favors buying; over 25 favors renting.

Expanded explanation

When P/R drops below 15, tenant base shrinks as buying becomes attractive. When above 25, renter pool grows — favorable for landlords.

Examples

  • Phoenix P/R ~24 = renter-favorable; Cleveland P/R ~9 = buyer-favorable.

More Market Analysis questions