Check whether an applicant can afford the rent — the ratio, the 30% rule, the 3x rent rule and the 40x rule, with the math shown.
The rent-to-income ratio is the share of an applicant's income that goes to rent. It is the single fastest affordability check a landlord can run, and it predicts late payments better than almost anything else on an application. Calculate it before you pay for a credit or background check — it costs nothing and it screens out the applications that were never going to work.
The convention is that rent should be no more than 30% of gross monthly income. It comes from US housing policy, where households paying more than 30% are classed as cost-burdened. It is a guideline, not a law, and in expensive metros a large share of renters exceed it. Treat it as a signal, not a cutoff.
Most landlords express the same idea as a multiple. 3x monthly rent means the applicant's gross monthly income must be at least three times the rent — mathematically the same as a 33.3% ratio. 40x annual rent is the New York convention: annual gross income must be at least 40 times the monthly rent, which is the same as 3.33x monthly. Some landlords in high-cost markets relax to 2.5x.
The 3x and 40x rules assume gross income, before tax. If you screen on take-home pay you are applying a much stricter standard than you think — roughly 25–30% stricter. Pick one and use it for everyone.
Employment wages, self-employment income, guaranteed bonuses and commissions, retirement and pension income, Social Security and disability benefits, housing vouchers and subsidies, alimony and child support, and verifiable investment income.
Several states and cities prohibit refusing an applicant because their income comes from a housing voucher or other public assistance. Where source-of-income protection applies, you must count the voucher as income — and in many of those places the ratio test applies only to the tenant's own share of the rent, not the full rent. Check your local rule before you set your threshold.
For roommates, most landlords combine all applicants' income and test against the full rent — that is what this calculator does when you fill in the additional-income field. The stricter alternative is to test each applicant against their share. Guarantors are usually held to a higher bar, commonly 80x monthly rent, because they are covering rent on top of their own housing costs.
Write your threshold into your screening criteria, publish it, and apply it to every applicant. Inconsistent application of an income test is one of the most common ways landlords end up facing a fair-housing complaint. A documented, uniform standard protects you.
Income is one of three things that matter — the others are payment history and prior evictions. My Rental Spot runs credit, background and eviction checks alongside the online application, free for landlords.
Divide monthly rent by gross monthly income and multiply by 100. Rent of $1,500 against $5,000 gross monthly income is $1,500 ÷ $5,000 × 100 = 30%.
It requires an applicant's gross monthly income to be at least three times the monthly rent. For $1,500 rent that is $4,500 per month, or $54,000 per year. It is the same standard as a 33.3% rent-to-income ratio.
It remains the standard guideline, but in many US metros a large share of renters pay well above it. Use it as one signal alongside payment history and credit, not as an automatic rejection.
Gross income, before tax. The 3x and 40x conventions assume gross. Screening on take-home pay applies a far stricter standard, and whichever you choose you must apply it to every applicant identically.
In many states and cities, yes — refusing an applicant because their income comes from a voucher or public assistance is illegal under source-of-income protection laws. Where those laws apply, the income test is often limited to the tenant's own portion of the rent. Check your state and city rules.
Income is one of three things that matter. My Rental Spot runs credit, background and eviction checks alongside the online application — free for landlords.
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