Many landlords ask tenants to earn at least three times the monthly rent. It’s a quick screening rule, not a law, and it varies by landlord and market.
Start from the rent to see what you need to earn, or start from your pay to see what you can apply for.
How to use the 3x Rent Calculator#
- Choose a direction. Start from a rent, or start from your income.
- Enter the number. Use gross income, before tax.
- Change the multiplier if needed. Some landlords ask for 2.5 or 3.5.
The rule#
For a rent of 1,200, you need to earn 3,600 a month, or 43,200 a year. If you earn 3,200 a month, the highest rent you qualify for under the rule is about 1,067.
Where the rule comes from#
Three times rent means rent takes about one third of gross income. That’s a little more generous than the 30 percent guideline that has been used in housing policy for decades, where a household spending over 30 percent is described as cost-burdened. Landlords like the rule because it’s easy to check against pay slips.
If you don’t meet it#
Options include a guarantor, a larger deposit, adding a co-tenant, or showing savings. In some places landlords may accept proof of assets instead of income. For a view based on your own budget, see the rent calculator.
Other rules landlords use#
The 3x rule is only one of several screening standards. Some landlords look at the 30 percent rule, where rent should be no more than 30 percent of gross income. In New York City, landlords commonly ask for an annual income of 40 times the monthly rent, and often 80 times for a guarantor. Those are about 3.3 and 6.7 times the monthly rent on a yearly basis.
Credit history, savings and references can sometimes offset a lower income. If you’re close to the line, ask the landlord what else they would accept before you apply.
Three worked examples#
| Monthly rent | Income needed at 3× | Yearly income | Hourly pay (40 h) |
|---|---|---|---|
| $900 | $2,700 | $32,400 | $15.58 |
| $1,500 | $4,500 | $54,000 | $25.96 |
| $2,400 | $7,200 | $86,400 | $41.54 |
The rule is that gross monthly income should be at least three times the monthly rent. That means rent takes up no more than one third (33.3 percent) of income before tax. A tenant earning $5,000 a month can therefore qualify for a rent of up to $1,666.67.
Guarantors, savings and other routes#
If you do not meet the multiple, there are common ways to qualify. A guarantor who earns enough, often at 4 to 5 times the rent, can sign with you. A larger deposit or a few months of rent paid in advance reassures a landlord. Savings can also count, and some landlords accept a bank balance equal to a year’s rent. Ask before applying, because a refused application can leave a mark on your record in some places.
Is a third a safe share?#
The ratio is a landlord’s test, not a budget. Rent at one third of gross income can be tight once tax, transport and debt are paid. If you take home 75 percent of your pay, one third of gross is 44 percent of what you receive. Many financial planners suggest keeping total housing costs, including utilities, under 30 percent of take-home pay. Work out your own numbers with the rent calculator.
Rules elsewhere: the UK and Lagos#
The multiple differs from place to place. In the UK, landlords and referencing agencies usually ask for an annual income of at least 30 times the monthly rent, which is 2.5 times the rent a month, and a guarantor if you fall short. In Lagos, landlords have traditionally asked for a year or two of rent in advance, though the Lagos State Tenancy Law of 2011 limits the advance a landlord can demand to six months for a yearly tenancy and one month for a monthly one. Know the rule where you rent, and ask for a written receipt and agreement for everything you pay.
Frequently asked questions#
Landlords ask that you earn at least three times the monthly rent.
Gross income, before tax, in most cases.
No. It’s a landlord’s screening standard, so it varies.
Often yes, if they co-sign or share the lease.
Gross, which is your income before tax and deductions. Landlords usually ask for payslips, a contract or bank statements to confirm it. Self-employed applicants may need tax returns or a few months of bank statements.
Landlords usually look at an average of recent months, supported by bank statements, invoices or tax returns. Prepare 6 to 12 months of statements, and be ready with a guarantor, a larger deposit or evidence of savings. Some landlords will accept a letter from a client or an employer stating expected income.