How Much Rent Can I Afford?
The 30% rule is a good starting point, but your debts and other costs change the answer. Here's how to set a rent budget that won't stretch you thin.
Rent is usually the single biggest line in your budget and a fixed commitment for the length of your lease — so getting the number right matters more than almost any other money decision you make month to month. Here's how to figure out what you can genuinely afford.
The 30% rule
The most common guideline is simple: keep rent at or below 30% of your gross (pre-tax) income. On a $60,000 salary, that's about $1,500 a month. It's popular because it leaves enough room for everything else — saving, debt, emergencies — without housing crowding them out.
Landlords use the same benchmark from the other direction, often requiring that your annual income be at least 40 times the monthly rent. Forty times a $1,500 rent is $60,000 — almost exactly the 30% figure. The two rules agree.
Why income alone isn't enough
The 30% rule is a starting point, not the whole story, because rent and your other debts compete for the same paycheck. A useful ceiling is to keep rent plus all debt payments within about 36% of gross income — the same back-end ratio lenders use for mortgages. Two people earning the same salary can afford very different rents if one is carrying a big car loan or student-loan payment.
Gross vs. take-home
The 30% rule traditionally uses gross income, and that's what landlords assess. But you actually live on your take-home pay, so budgeting from net income is more conservative and realistic — especially if you have a high tax rate or large pension contributions.
Don't forget the hidden costs
The headline rent isn't your only housing expense. Budget for:
- Utilities (electricity, water, gas, internet)
- Renters insurance
- Parking, if it isn't included
- Commuting costs from the location
- Upfront cash — a deposit plus first month's rent
These can add a few hundred dollars a month, which is why it's wise to land below your theoretical maximum rather than at it.
Find your number
Use the rent affordability calculator to get a recommended rent based on your income and debts. Once you've set a budget, the 50/30/20 budget rule helps you balance the rest of your spending — and if you're weighing renting against buying, see our guide on rent vs. buy.