Rent to Value Ratio (RTV/RTP)

Investor Term: 

RTV/RTP

Definition: 

Rent to value ratio (RTV), also known as rent capitalization rate (RCR), is a ratio that compares the annual rent generated from a property to its market value. It is a measure of how well a property is performing as an investment. 

Formula: 

RTV = Annual Rent / Market Value

Example: 

For example, if a property generates $10,000 in annual rent and has a market value of $200,000, then its RTV would be 0.05.