On this page
The quick calculation
Monthly gross income × 0.30 = maximum rent + utilities
| Annual income | Monthly income | 30% for rent + utilities |
|---|---|---|
| $20,000 | $1,667 | $500 |
| $30,000 | $2,500 | $750 |
| $40,000 | $3,333 | $1,000 |
| $50,000 | $4,167 | $1,250 |
| $60,000 | $5,000 | $1,500 |
| $75,000 | $6,250 | $1,875 |
Subtract expected utilities (electric, gas, water, internet) to find your maximum rent.
Landlord income requirements
Many landlords require gross income of 2.5× or 3× the monthly rent. For a $1,200 rent, that’s $3,000–$3,600 per month. Ask for requirements in writing before paying application fees.
Build a real budget
List monthly costs:
- Rent
- Utilities and internet
- Renters insurance ($10–$30 is typical)
- Parking, pet rent, and fees
- Transportation (car payment, gas, insurance, or transit)
- Food and household supplies
- Childcare
- Health care and prescriptions
- Debt payments
- Phone
- Savings and emergencies
If rent at 30% leaves too little for essentials, target a lower rent.
One-time move-in costs
Security deposit, first month’s rent (sometimes last month’s), application fees, utility deposits and connection fees, moving costs, and basic furniture. See moving cost assistance.
If affordable rents are out of reach
- Apply for Section 8, public housing, and subsidized apartments, where rent is about 30% of income.
- Check tax credit apartments and housing lotteries.
- Consider shared housing or a room rental.
- Reduce other costs with LIHEAP, Lifeline, and SNAP.
- Compare neighborhoods with lower rent and reasonable commutes. See comparing neighborhoods.
Worked example
Jordan earns $3,200 a month before taxes ($38,400 a year).
- 30% guideline: $3,200 × 0.30 = $960 for rent plus utilities
- Expected utilities (electric and internet): $140
- Target rent: about $820
- Landlord income test at 3× rent: $820 × 3 = $2,460—Jordan qualifies
If Jordan pays $400 a month for childcare and $300 in car payments, a lower rent target leaves more room for savings.
When the 30% rule doesn’t fit
- Low incomes: 30% of a very low income may leave too little for food and other essentials; many families spend more on rent because they have no choice. That’s why subsidized housing uses 30% of adjusted income with deductions.
- High-cost cities: many renters spend 40% or more; if you do, reduce other costs and build savings where you can.
- High debt or childcare costs: base your budget on take-home pay after these expenses.
A 50/30/20 check
Some people use a take-home pay budget: about 50% for needs (housing, food, utilities, transportation, insurance), 30% for wants, and 20% for savings and debt payoff. If housing alone exceeds half your take-home pay, you’re likely stretched.
Ways to lower housing costs
- Choose a unit with utilities included if your usage would be high.
- Negotiate a longer lease for a stable rent.
- Look at income-restricted apartments with rents below market.
- Share housing to split costs.
- Check eligibility for SNAP, LIHEAP, Lifeline, and the EITC, which free up money for rent.
- Ask about move-in specials in markets with higher vacancy.
Frequently asked questions
What does cost-burdened mean?
HUD and researchers call a household cost-burdened when it spends more than 30% of income on housing, and severely cost-burdened above 50%. About half of U.S. renter households are cost-burdened, according to Harvard’s Joint Center for Housing Studies.
Should I use gross or take-home pay?
The 30% guideline uses gross (before-tax) income. If you have high taxes, debts, childcare, or medical costs, basing your budget on take-home pay is safer.
What if the landlord requires three times the rent?
Some landlords accept a co-signer or guarantor, a larger deposit (where legal), proof of savings, or a rent guarantee company. Voucher holders should ask that the requirement apply only to their share of the rent; some jurisdictions require that.
Sources and verification
Use these sources to check program rules. Funding, openings, and local procedures must be confirmed with the agency handling your application.
- Rental burdens: Rethinking affordability measuresHUD USER
- America’s Rental HousingHarvard Joint Center for Housing Studies
- Budgeting toolsConsumer Financial Protection Bureau
Found a changed rule or a broken link? Report a correction for this guide.