Tuesday, 18 February 2014

Can you beat my Price-To-Rent Ratio? ; )

Just moved into a new rental house.

Good time to talk about Price-to-Rent Ratio (Price/Annual Rent)

According to Investopedia
Ratio 1-15:   better to buy than rent
Ratio 16-20: typically better to rent
Ratio >21:    much better to rent

My old place~ 26 (assessed price ~$700k)
My new place~ 32 (assessed price ~$800k)

Rent’s slightly lower (after we bargained the asking rent down by $350/month – the perks for being a “desirable tenant” with a wife who can probably teach a course on bargaining) 

Living area increased from ~1700sf to ~2000sf, house also <10 years old, better view, pleasant landlord looking for long-term lease. Overall a comfortable place to watch the RE drama unfold.

- If you have time, check out The Province's piece on P-R Ratio for Greater Vancouver

As an aside, I had heard from almost 10 people (including my mother-in-law, my parents, Chinese clients (who are home owners), friends) in the past few days telling me (without being asked) that they think Vancouver home prices will drop. Could the tide really be turning this time?


  1. I'm at 28, and I thought that was good, but from the map I'm getting hosed on a relative basis! Though I'm in a condo, and it's houses that are where the real steals are for renters.

    1. 28 is very good! I'm not sure how Province got those figures. Take Burnaby for example, at P-R ratio of 44, it would mean a $800k home renting at $1,515. Gotta be of a pretty old/beat-up house with most of value in Land value to get that kind of PR ratio...