3x Rent Rule: What You Need to Know

Jan 7th 2024
The 3x rent rule is a general guideline that many landlords follow, which says that the ideal income level of a potential tenant is 3 times the amount of rent. So if the rent is $2,000 per month, you should earn at least $6,000 each month in gross income to qualify for the apartment.

If you’re in the market to move, it’s a time of excitement but also one of uncertainty. You get to look for new and interesting places to live, but the application process can be nerve-wracking. If you’ve moved recently, you may already know about the 3x rent rule and how it can affect your application process. If not, we’ll do a deep dive into the 3x rent rule so that you are fully prepared to meet the requirements of your next potential landlord. 

hash-markTable of Contents

Do I Really Need to Make 3x the Rent?
Is the 3x Rent Rule Gross or Net?
How to Calculate 3x the Rent
Why Do Landlords Ask for 3x Rent?
What if I Don't Make 3 Times the Rent?
3x Rent Rule Bottom Line

hash-markDo I Really Need to Make 3x the Rent?

Yes, in most cases, you will need to meet the 3x rent rule or at least be incredibly close to it. However, in situations where you may be receiving rent assistance or putting up additional security deposits, this may not apply. There may also be some “wiggle room” for generous landlords, who may not require you to meet the rule, but will still expect you to have a steady income that demonstrates your ability to pay the rent.

For example, someone who has been granted a section 8 housing choice voucher may not make 3 times the rent, but the federal government is also subsidizing their rent burden. A section 8 voucher will generally cover 60%-70% of the rent for a home in the program, lessening the financial requirement of the tenant.

hash-markIs the 3x Rent Rule Gross or Net?

The 3x rent rule is based on your gross income, not your net income. That means that your gross monthly income should be 3x the monthly rent. For example, if the rent is $1,400, you'll need to earn a gross monthly income of $4,200 to afford the apartment. 

hash-markHow to Calculate 3x the Rent

To calculate 3x the rent, you just need to multiply the rent amount by three. For example, if you find an apartment with a $1,500 per month rent amount, you will need to make $4,500 in gross monthly income to be able to afford it. 

You can also calculate this on a yearly basis instead of a monthly basis. Using the above example, you'd first calculate the yearly rent ($18,000) and then multiply that by 3, so you would need a yearly income of $54,000 to be able to qualify for the apartment. 

Showing your income can be as easy as pulling your last few bank statements and showing them to your potential landlord. For gig workers or those who are self-employed, this burden of documentation can get a little more cumbersome. In situations where you may not have a bank account or a traditional W-2 income, you might have to show 1099s or other information that shows a consistent and reliable income.

hash-markWhy Do Landlords Ask for 3x Rent?

Landlords want you to make 3x the rent, because they want to know that you can afford the apartment. If you earn 3 times the rent, it is assumed that you will be able to make the monthly rent payments, and that helps protect them and you. By following the 3 times rent rule, they give themselves the best opportunity to find a tenant who can pay the rent reliably and consistently without jeopardizing their other financial obligations. This protects them from having to go through the unpleasant, though occasionally necessary, eviction process.

Many people don’t realize that when a landlord accepts tenants that fit the 3x rent rule, they are protecting tenants from financially overextending themselves. If someone doesn’t fit the 3x rent rule, they may still be able to afford the rent of a particular home, but it may set them up for failure when meeting other basic living expenses like utilities, food, and more. 

If you're a tenant, it can be reckless to rent a place if you don't make 3 times the rent unless you have significant savings or financial support from parents or loved ones. 

hash-markWhat If I Don’t Make 3 Times the Rent?

There are some cases where you simply don’t meet the 3x rent rule, even though the amount of rent, when combined with conservative living expense estimates shows you should be able to afford the rent comfortably. If you don't make 3 times the rent, you can still try to get the apartment by putting up a larger security deposit, finding a guarantor, or demonstrating your fiscal responsibility by showing your potential landlord bank statements that show you being responsible with your money and discretionary spending. They may be willing to make an exception. Good money management is never a bad thing.

Since it’s not a law of any sort and just a general guideline for landlords and renters, there will always be the possibility of finding a flexible landlord.

hash-mark3x Rent Rule Bottom Line

The main thing to keep in mind if you’re looking for a new place to live, is that you should be prepared to prove you can afford it by showing you make at least 3 times the rent. Before you start your home search, be sure you have gathered your proof of income documentation so that you can show you’re financially able to cover rent as well as living expenses. Even if you don’t make exactly 3x the rent amount, have some proof that you can pay the requested rent while still living within your means.