One suggestion to the buy-versus-rent question can be answered using the price-to-rent ratio. Find two houses of similar size and quality in comparable neighborhoods, one for sale and the other for rent. Divide the price of the house for sale by the total cost of the rental for 1 year. If the quotient is higher than 20, renting might be the better option. If the quotient is below 15, buying might be the better option.
(a)
A house in San Diego, California, is priced at $520,000. The rent on a comparable house is $3,200 per month. Find the price-to-rent ratio. Round to the nearest tenth.

The price-to-rent ratio for the house in San Diego is 13.5.

Since this value is below 15, it suggests that buying might be the better option in this case.

Do you want further details or have any questions?

Here are some related questions to consider:
1. How does the price-to-rent ratio vary across different cities?
2. What factors affect the decision to buy or rent apart from the price-to-rent ratio?
3. Can the price-to-rent ratio predict long-term real estate trends?
4. How do property taxes and maintenance costs factor into this decision?
5. What role does interest rate play in buying decisions?

**Tip:** Always consider other costs, such as property maintenance and insurance, when evaluating a buy-vs-rent scenario.

A house in San Diego, California, is priced at $520,000. The rent on a comparable house is $3,200 per month. Find the price-to-rent ratio. Round to the nearest tenth.

Learn how to calculate the price-to-rent ratio for a property in San Diego priced at $520,000, with monthly rent of $3,200. Discover how this ratio helps in deciding whether to buy or rent a house. Suitable for high school students or anyone interested in real estate valuation.

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