Price to Rent Ratio - Help Needed

[Anne Christensen]

Hi, I am brand new to real estate investing and need some assistance understanding price to rent ratios.  My understanding is that a lower price to rent ratio may indicate a property’s ability to generate cash flow.  That said I am also reading that a higher price to rent ratio may indicate areas where it is more attractive to rent than to buy.  I would assume areas where there are higher price to rent ratios, there may be more rental properties on the market, driving rental prices down.  I do understand this is just one factor in evaluating investment properties, but is there a “rule” or general number for price to rent ratios that indicate a “buy”?  Many thanks!