Rent to Price Ratio Data

[Alex Rearmice]

Hi all!

Does anyone know where I can find rent-to-price ratio data for all the major cities in the U.S.?

I can find avg. price data pretty easily via a number of online sources. I can't seem to find avg. rent data, but if I could, I'd compile my own spreadsheet - and share it here.

Maybe someone knows where this data can be found?

Alex

[Michael Rossi]

I don't know where you can find the average rent data and getting the average price data won't be helpful, because the higher end sales (which are not rentals) will skew that number high (as it relates to rentals). So, finding a ratio of average monthly rents to average prices won't give you any meaningful information regarding rentals.

However, if you look around, I think you'll find that the average monthly rent-to-price ratio for rentals throughout the United States is about 0.8% to 1.0% (even a little lower in some bubble areas). There is no study behind that, I'm just going off my experience, both in the real world and here on BP. If you keep your eyes open, I believe that you'll see that is pretty close.

Having said that, all that ratio tells you is what the failures are paying for their property. The truth is that the vast majority of rentals in this country are owned by individuals and the vast majority of newbies fail. So, when you see that the average monthly rent to price ratio in your area is 1%, that just tells you that this is the ratio the losers are buying at. If you buy at the same ratio, you'll fail also.

Mike