America's Best Cities To Rent
It's the age-old problem when looking for a place to live: buy or rent?
To see which cities offer the best rental opportunities, real estate website Trulia.com conducted an analysis of the most advantageous ratios between rental prices and home values. Trulia looked at prices for two- bedroom apartments, condos and townhouses for sale and for rent in the 50 largest US metro areas. Total costs include rent and renter's insurance vs. buying a home, which includes down payment, mortgage principal and interest, insurance, closing costs, property tax and applicable tax deductions.
The report found that the best places to rent are in urban job centers where rental demand remains high and where home values have declined only slightly. Other advantageous areas are cities that have experienced more stability in home prices over the past decade and have remained regional economic centers.
To calculate the price-to-rent ratio, Trulia compared average monthly rent costs with average monthly home owner payments, arriving at a final number that identifies whether buying or renting offers a better value.
According to Trulia, a price-to-rent ratio over 21 indicates the cost of owning a home is far greater than renting, a ratio of 15 or below tips in favor of ownership is, while a ratio of 16-20 is something of a toss up, depending on individual financial situations, although owning is generally more expensive in this mid-range.
Trulia also concludes that although a city may have a renter-friendly price-to-rent ratio, it is not necessarily unwise to purchase a home there, as prices have fallen during the recession and real estate in these cities could be a potentially good long-term investment.
So, which US cities offer the best renting opportunities right now? Click ahead to find out!
By Paul ToscanoPosted 3 June 2010
10. Dallas, Texas
Price-to-rent ratio: 18.5
Average home list price: $293,767
Average rental price: $1,324
9. Cleveland, Ohio
Price-to-rent ratio: 19.68
Average home list price: $246,895
Average rental price: $1,046
8. San Diego, California
Price-to-rent ratio: 19.78
Average home list price: $396,409
Average rental price: $1,670
7. Kansas City, Missouri
Price-to-rent ratio: 20.16
Average home list price: $240,076
Average rental price: $992
6. Oklahoma City, Oklahoma
Price-to-rent ratio: 21.38
Average home list price: $195,663
Average rental price: $763
5. San Francisco, California
Price-to-rent ratio: 21.55
Average home list price: $774,728
Average rental price: $2,996
4. Portland, Oregon
Price-to-rent ratio: 22.41
Average home list price: $307,858
Average rental price: $1,145
3. Seattle, Washington
Price-to-rent ratio: 24.87
Average home list price: $461,330
Average rental price: $1,546
2. Omaha, Nebraska
Price-to-rent ratio: 26.41
Average home list price: $275,844
Average rental price: $870
1. New York, New York
Price-to-rent ratio: 32.59
Average home list price: $1,383,612
Average rental price: $3,538