Screening tenants, landlords check the rent-to-income ratio — rent as a share of gross income, or its inverse, the income multiple. A common bar is rent ≤ 30% of income, or income ≥ 3× rent.
The example
$1,500 rent, $5,200 income.
| A | B | |
|---|---|---|
| 1 | Item | Value |
| 2 | 1500 / 5200 | — |
| 3 | Ratio | → ~28.8% |
The formula
The formula:
How it works
How it works:
- Rent-to-income = monthly rent ÷ gross monthly income.
- The income multiple is the inverse: income ÷ rent (a 3× rule means ≤ 33%).
- Flag with IF: pass if ratio ≤ threshold (commonly 30–35%).
- Use gross income consistently, and combine multiple applicants’ incomes if co-signing.
The 3× rule and the 30% rule are the same line stated two ways. Requiring income ≥ 3× rent is the same as rent ≤ 33% of income. Pick one convention and apply it uniformly to every applicant — consistency matters legally and operationally. Combine co-applicants’ gross incomes for the denominator when they’re jointly responsible. This is illustrative screening math, not legal or fair-housing advice.
Try it: interactive demo
Monthly rent and income.
Variations
Income multiple
Inverse ratio:
Qualify flag
Pass the screen:
Max qualifying rent
From income:
Pitfalls & errors
Gross income. Use gross, not net, consistently.
Same units. Monthly rent with monthly income.
Fair housing. Apply criteria uniformly — not legal advice.
Practice workbook
Frequently asked questions
How do I calculate rent-to-income ratio in Excel?
What's the income multiple?
What's the max rent someone qualifies for?
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