3x Rent Calculator: Does This Applicant Earn Enough?
Multiply the rent by your required multiple and compare it with the applicant's gross monthly income: at $1,650 rent and a 3x rule, they need $4,950 a month. This calculator does that, adds co-signer income, and shows the most rent the income supports. Use it alongside, not instead of, the reports from tenant screening services for landlords.
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How to use the 3x rent calculator
Enter:
- Monthly rent for the unit.
- Applicant income, monthly or annual. Use gross (pre-tax) income from pay stubs, an offer letter, benefit statements or tax returns. Add up all applicants on the lease if they’ll share the rent.
- Required multiple, anywhere from 2.5x to 3x. Use the figure in your written screening criteria.
- Co-signer income, if there is one.
The calculator tells you whether the applicant qualifies at your multiple and the maximum rent their income supports.
The rent-to-income formula
- Income needed = monthly rent x multiple
- Income ratio = applicant’s gross monthly income / monthly rent
- Maximum affordable rent = gross monthly income / multiple
Annual income is divided by 12 first.
A worked example
Your unit rents for $1,650. An applicant earns $50,400 a year, which is $4,200 a month.
- Income needed at 3x: $1,650 x 3 = $4,950. Not met.
- Income needed at 2.5x: $1,650 x 2.5 = $4,125. Met.
- Income ratio: $4,200 / $1,650 = 2.55x
- Maximum rent at 3x: $4,200 / 3 = $1,400
Whether this applicant qualifies depends on the rule you set before you listed the unit, not on the person in front of you. If your criteria say 3x with a qualifying co-signer as an alternative, they’d need one.
What a good result looks like
The 3x rule is a rough affordability check. It keeps rent at about a third of gross income, which lines up with the common definition of a cost-burdened household as one paying more than 30% of income on housing. An applicant at 2.8x with a long, clean payment history can be a lower risk than one at 3.5x with recent evictions. Income is one test among several: credit, rental history, and verification of the income itself.
Write your criteria down before you advertise. That means the multiple, how you count combined incomes, what income documents you accept, and your co-signer policy. Then apply them in the same order to every applicant. Consistency is your best protection under the Fair Housing Act.
Fair housing and source-of-income cautions
- Source of income. Many states and cities prohibit refusing a tenant because of where their lawful income comes from, which can include housing vouchers, Social Security, disability benefits and child support. Count all lawful, verifiable income the same way as wages.
- Voucher holders. When a housing authority pays part of the rent, apply your multiple to the tenant’s share only. Counting the full rent against the tenant’s income can screen out voucher holders, which is illegal where source of income is protected.
- Disparate impact. Even a neutral rule can be challenged if it falls hardest on a protected class and isn’t needed for a legitimate business reason. Keep your multiple reasonable and documented.
- FCRA. If you turn someone down based partly on a consumer report, send an adverse action notice.
Limits of this calculator
It doesn’t verify income, judge whether income is stable, or account for debts. Self-employed applicants and gig workers often need two years of tax returns or bank statements to show a fair average. And it can’t tell you what your state or city requires. Check local source-of-income rules before you set your criteria. This is general information, not legal advice.
Questions landlords ask
The questions we get most, each answered in a paragraph.
How do you calculate 3 times the rent?
Multiply the monthly rent by 3. For $1,650 rent, the applicant needs at least $4,950 in gross monthly income, which is $59,400 a year. To go the other way, divide the applicant's monthly income by 3 to get the highest rent that meets the rule. Someone earning $4,200 a month qualifies for up to $1,400.
Is the 3x rent rule gross or net income?
Gross, in almost every case. Landlords and property managers usually compare rent with pre-tax income because that's what pay stubs, offer letters and tax returns show most clearly. Whatever you use, write it into your screening criteria and apply it the same way to every applicant.
Can I use the 3x rule with a Section 8 voucher holder?
Apply it to the portion of the rent the tenant pays, not the full contract rent, because the housing authority pays the rest directly to you. Many states and cities ban discrimination based on source of income, which can include vouchers, so a rule that screens out voucher holders by counting the full rent can break the law there.
How should I count a co-signer's income?
Many landlords require a co-signer or guarantor to meet a higher multiple on their own, often 4x to 5x the rent, because they are also covering their own housing. Others add the co-signer's income to the applicant's. Pick one policy, put it in your written criteria, and use it for everyone.