Rent-to-Income Ratio Calculator
Check whether an applicant's income supports the rent. See the rent-to-income ratio, the income multiple, the income required at your standard and the highest rent that income supports.
Rent-to-Income Ratio Calculator
Check whether an applicant's income supports the rent. See the rent-to-income ratio, the income multiple, the income required at your standard and the highest rent that income supports.
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Book a DemoA screening aid only. Apply one written income standard to every applicant, and check state and local rules, which can limit how income requirements apply, including for applicants who use housing vouchers. This is not legal advice.
How to Calculate Rent-to-Income Ratio
Rent-to-income ratio is the monthly rent divided by gross monthly income, shown as a percentage. An applicant who earns $5,000 a month and applies for an $1,800 unit has a ratio of 36.0%.
Landlords often state the same test the other way round, as an income multiple. Income of three times the rent equals a ratio of 33.3%. The 30% rule of thumb equals income of about 3.33 times the rent.
Worked Example
At $1,800 rent and a 3x standard, the income required is $5,400 a month. An applicant earning $5,000 is at 2.78x rent, a gap of $400. That income supports a maximum rent of $1,667 at the same standard.
Using an Income Standard Fairly
An income standard works only if it is written down and applied the same way to every applicant. Count all verifiable household income, not only wages, and decide in advance how you treat co-applicants and guarantors.
Local law can limit income standards. Some states and cities restrict how they apply to applicants with housing vouchers or other lawful sources of income. Check the rules where the property is before you set a multiple.
What the Ratio Does Not Tell You
Income is one signal. Two applicants with the same income can carry very different debts, which is why this calculator also shows rent plus monthly debt payments as a share of income. Payment history and verified employment matter as much as the ratio.
Related Calculators
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- Tenant Turnover Cost Calculator: See what a failed tenancy costs.
- Vacancy Cost Calculator: Weigh the cost of waiting for a stronger applicant.
Frequently Asked Questions
What is a good rent-to-income ratio?
A common rule of thumb is rent at or below 30% of gross monthly income. Many landlords use the related standard of income at least three times the rent, which is a ratio of 33.3%.
How do I calculate the 3x rent rule?
Multiply the monthly rent by three. An $1,800 unit needs $5,400 in gross monthly income, or $64,800 a year.
Is rent-to-income based on gross or net income?
Gross income, before taxes and deductions, is the usual basis. Whichever you choose, use the same basis for every applicant.
Can a landlord require income of three times the rent?
In most places a landlord may set a reasonable income standard if it is applied to everyone. Some states and cities limit how it applies, especially for applicants with housing vouchers, so check local law.
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