What is the price to rent ratio? Simply put, it’s a ratio helps us understand how expensive buying property is relative to renting. At the time of writing, San Antonio Texas has a price to rent ratio of 13.68. Seattle Washington has a price to rent ratio of 35.09. What explains the very high ratio in Seattle? Most likely, its yet another sign of Seattle’s property bubble.
With such a high price to rent ratio, Seattle is a difficult place for mom and pop landlords to cash flow on rental properties. The high price to rent ratio is another reason Seattle is prone to high foreclosure rates during downturns. Covering mortgage costs with rentals fees is often not an option for Seattle property owners in financial stress. Here’s a great article on the price to rent ratio of various US cities. https://smartasset.com/mortgage/price-to-rent-ratio-in-us-cities
3 Comments
Tim
3/29/2018 09:01:48 am
Nice article! When I buy I always first do the math to make sure I could rent to cover the mortgage.
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Eric
3/29/2018 11:06:17 am
I'll keep buying in Seattle with the hope someone else will pay even more!!!
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101023
3/29/2018 11:07:40 am
@Eric - Hope is not a strategy. All bubbles are based on the "bigger fool" idea. Hope its not you when the music ends.
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