That’s hot.

Via TechCrunch: HotPads.com – an American real-estate website that specialises in rentals – has just added a nifty new feature: rent ratio heat maps.

The long-term average rule of thumb is that houses should be priced at about 13 to 15 times the annual rent (a gross yield of roughly 7%). Anything above that means houses are expensive to buy, and you should prefer to rent (conversely, below that level, you should start to look at buying).

A few interesting little data points: you’re mostly better off renting in SF, except in the ultra-expensive Nob Hill and Marina districts. Miami, on the other hand, is a sea of blue, even out on Miami Beach. I think this may be an artefact of the housing bubble – purchase prices plunged 12 to 18 months ago, but rents are only now starting to fall as the supply glut hits the market – but if you need to live in Miami, you’re definitely a lot better off buying than renting.

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One Response to That’s hot.

  1. Eddie Stewart says:

    Another great tool that I’ve been using for real estate searches, etc. is the website by PropertyMaps. It has been an incredible tool. Another good thing is that they teamed up with RealtyTrac for foreclosure information.

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