Naked Apartments: Search apartments for rent in New York City

Rent to Income: How Much Can I Afford For Rent?

December 6th, 2010 : The Naked Apartments Team

Rent to Income Equals Your Income Divided by Forty

Before you start searching for your next apartment, you should know how much rent you can afford, or the income needed to get approved by a landlord.

Rent to Income

Landlords typically require that your annual income is at least 40 times the monthly rent. For example, if you and your roommate are looking at a $3,000 per month apartment, the landlord would require a combined income of $3,000 × 40, which equals $120,000. To determine how much rent you (and your potential roommates) can afford, simply divide your combined annual incomes by 40.

How Much Rent is Affordable?

You might have also heard that you should spend no more than 30% of your annual income on rent.  Spending 30% of your yearly income on rent is widely believed to be an affordable amount, leaving enough money for all your other expenses.

What’s the difference between 30% and 40 times the monthly rent? Absolutely nothing, they’re just two different ways of deriving the same number.  The 40x trick is just easier to calculate.

For example, let’s take $120,000 of income.

  1. 30% of $120,000 = $36,000.
  2. $36,000 ÷ 12 months = $3,000 per month.

But to make the calculation easier, just divide $120,000 by 40.

  1. $120,000 ÷ 40 = $3,000  per month.  Voila! Math Magic!

Again, to determine how much rent you (and your potential roommates) can afford, simply divide your combined annual incomes by 40. Don’t have a calculator handy?  Use the following table to look up your maximum rent.

Combined Annual Income Maximum Monthly Rent
$32,000 $800
$36,000 $900
$40,000 $1,000
$44,000 $1,100
$48,000 $1,200
$52,000 $1,300
$56,000 $1,400
$60,000 $1,500
$64,000 $1,600
$68,000 $1,700
$72,000 $1,800
$76,000 $1,900
$80,000 $2,000
$84,000 $2,100
$88,000 $2,200
$92,000 $2,300
$96,000 $2,400
$100,000 $2,500
$104,000 $2,600
$108,000 $2,700
$112,000 $2,800
$116,000 $2,900
$120,000 $3,000
$124,000 $3,100
$128,000 $3,200
$132,000 $3,300
$136,000 $3,400
$140,000 $3,500
$144,000 $3,600
$148,000 $3,700
$152,000 $3,800
$156,000 $3,900
$160,000 $4,000
$164,000 $4,100
$168,000 $4,200
$172,000 $4,300
$176,000 $4,400
$180,000 $4,500
$184,000 $4,600
$188,000 $4,700
$192,000 $4,800
$196,000 $4,900
$200,000 $5,000
$204,000 $5,100
$208,000 $5,200
$212,000 $5,300
$216,000 $5,400
$220,000 $5,500
$224,000 $5,600
$228,000 $5,700
$232,000 $5,800
$236,000 $5,900
$240,000 $6,000
$244,000 $6,100
$248,000 $6,200
$252,000 $6,300
$256,000 $6,400
$260,000 $6,500
$264,000 $6,600
$268,000 $6,700
$272,000 $6,800
$276,000 $6,900
$280,000 $7,000
$284,000 $7,100
$288,000 $7,200
$292,000 $7,300
$296,000 $7,400
$300,000 $7,500

1 Comment
Categories: Renter Tips
  • This is great, but you should really go about it once you’ve figured out your actual take-home pay. A salary can look great on paper, but if in an expensive city like New York 40% is withheld from each pay check, your actual budget is a great deal less than you think.

Leave a comment
© Copyright 2014 Naked Apartments