Price to rent is an interesting way to compare different areas. It’s a measure of how high real estate prices are compared to real estate rents. Everyone must do one or the other, and this metric can help guide your real estate decisions. The formula used is:
(Median Price) / (Median Annual Rent) = Price to Rent
For Example:
$100,000 / $9,000 ($750 per month) = 9 Price to Rent
Generally, the higher the price to rent, the more attractive the area is to live. I was able to download and sort price to rent data for the majority of Birmingham Zip Codes. The median for all zip codes was 10.69. This ranks #367 out of 726 Metro areas tracked. For comparison, here Mashvisor ranks the top 10 and bottom 10 cities by price to rent. The data I used comes from Zillow research.
You must be logged in to post a comment.