Should You Rent or Buy in Your Neighborhood

Deciding whether to rent or buy can be a difficult choice. We supply powerful tools to help make that choice a little easier for you.

Enter Your Zip Code and Get the Quick Answer

How Did We Decide Whether You Should Rent or Buy?

We used the price to rent ratio, supplied by Zillow.com, to determine whether people should generally buy or rent in any given zip code. The ratio uses the median price and rent of a given area to determine which choice is more affordable over time. We added a small bit of nuance to the decision making process, but other than that, we use the tried and tested method to help you make a more informed choice.

How does the Price to Rent Ratio work?

The price to rent ratio is a well established economic metric that checks the affordability of of owning a home versus renting. The formula to calculate the ratio is median home value / (12 * Median Monthly Rent). Or in plain words, the full median value of a home, divided by the annualized cost of rent. It is generally believed that if the ratio is a 15 or below, then it is better to buy, above that it is better to rent, and above 21 it is MUCH better to rent.

Here is a visual breakdown

Now Try the Interactive Breakdown

Find the Best Neighborhood to Buy Or Rent in Your Area

Now that you’re properly trained, you can use zip code level data to find the best place to live or buy near you. This is just like the previous map, but with much more detail.

Curious About Buying?

If buying in your area looks interesting, use this mortgage calculator to see how much you can afford.

Check out our other tools. If you want more detail about renting in your neighborhood, check out our apartment tools here. If you’re ready to buy, check out our plethora of other buying tools here.

Those Tools Suck, I Want Something Different!

No problem, let us know what you want to see and we will let you know when we have it up!

Sources:

Property Tax Data: The 2010-2014 American Community Survey, U.S. Census Bureau, NAHB estimates
Home Value Data: Zillow Research

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