About this calculator
The 3x Rent Calculator will enable you to find out the amount of income that you will require to pay a given monthly rent, or the reverse. Just type in monthly rent to see the income it takes that is three times the amount of rent, or type in your income to see what is the highest amount of rent you can afford according to the "3x rule". It is also possible to add several tenants to understand the impact of shared income on affordability.
What Does “3x the Rent” Really Mean?
While searching at the apartments you have likely come across the term must earn 3x the rent. But what does it really mean? In simple terms, this regulation is a fast method through which landlords will know whether a tenant is comfortably able to pay his or her rent on a monthly basis.
3x the rent implies that your gross monthly income (before tax) must be three times of what rent is in a month. As an illustration, you should earn at least $3,000 per month or higher in order to be eligible assuming that rent is 1,000 per month. The reason why landlords apply this rule is to make sure that you have enough to pay bills, food and save after settling your rent.
Why Landlords Use the 3x Rule
The reason why landlords employ such a rule is that it provides a fast and efficient method of determining financial stability. It assists them to estimate the income level of a potential tenant to meet his or her payment on the rent and other living expenses including utilities, food, transportation, and even insurance. Landlords can make sure that the rent is not more than a third of the income of a person and thus minimise the chances of late or non-payment. The 3x rule does not only bring about landlord protection but helps the tenants have a balanced budget minus strain on their purse.
Practically, this regulation contributes to the development of a just and equal treatment of the screening process. Instead of basing their search on subjective judgments, landlords have an opportunity to employ an objective criterion in processing applications. Nevertheless, the rule is not always ideal, as it may seem unrealistic in the expensive cities where the rent is too expensive one in relation to the average income. That is why other landlords take into account such factors as savings, co-signers or general credit health.
Finally, the 3x rent regulation serves as a protection to both sides. It is a surety that landlords will get dependable tenants and the renters will be aware of what they can comfortably afford.