Rent to Value Ratio (RTV/RTP)

Investor Term: 

RTV/RTP

Definition: 

The rent-to-value ratio (RTV), also known as the rent capitalization rate (RCR), is a ratio that compares the annual rent generated from a property to its market value. It measures 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.