What If I Don’t Make Three Times the Rent?

If you’re looking for a new apartment to rent in NYC (or any other major city for that matter), there’s a good chance you’re already saving up. It’s a wise move! However, you may also have come across the old ‘three times the rent’ rule. It’s something of a regulation that many apartment communities and setups swear by.

“But what if I don’t make 3 times the rent?” I hear you ask. “Can I still apply for an apartment?” Keep reading, and I’ll take you through what you really need to know.

There’s also a handy little calculator below that will help you determine how much income you would need to show to meet the 3x rent rule. You can even use it as a 2.5 times the monthly rent calculator or 2 times the rent calculator.

What is the 3x rent rule?

The 3x rent rule is a common condition that many US landlords impose on their tenants to show that they their gross income is three times the rent payment. Outside of the social housing or rental assistance programs, this is just an informal condition, so there may be a lot of leeway in how this rule is interpreted.

Let’s apply this rule to, say, an apartment in NYC worth $2,500 per month. Multiply that by three, and you get $7,500 of income needed per month. If the landlord of this apartment uses the 3x rent rule, they’ll expect prospective tenants to be earning at least $90,000 per year as a household. That means you and a partner, for example, should bring in this total per annum as a couple.

There are some exceptions and intricacies to how this rule may be applied. For example, if you rent an apartment with roommates but on one single rental contract, you may have to afford three times the rent each. This is all because roommates don’t always move out together. If one tenant leaves and the other has to pick up the rent for a while, the landlord is at least assured the remainder can afford the cost.

However, if your landlord rents out the rooms in an apartment or a house individually, they may require you to show that you earn 3x the rent for just your room. At the end of the day, it’s all up to the landlord.

As you may appreciate, landlords use the 3 times the rent rule to ensure they get paid what they’re due and on time. It’s a way of ensuring the tenants they bring on can afford the costs they demand. Landlords have lots of money tied up in the property, so it’s only reasonable that they try to get the best tenants possible!

Why do some landlords ask for three times the rent?

It’s all about security. A tenant that earns three times the monthly rent on an apartment has – hypothetically – enough wiggle room to still clear payments if they experience a financial lull.

For example, if you’re earning $90k and lose your job, the 3x ensures that you can (again, hypothetically) pay for housing while looking for more work.

If you’re living as a couple, the risk may be even lower. If one of you loses a job and reduces your income to 1.5x the rent, that gives you more time to regain employment and keep up with the rent.

From the landlord’s perspective, it’s all about staving off eviction. Evictions are not only stressful and costly for tenants, but for landlords, too.

There’s also security for you in that the 3x rent rule allows you to afford food, travel, and fuel in the city. If you just make enough to afford the rent, you’re leaving yourself hugely short elsewhere.

But what if I don’t make three times the rent?

If you don’t currently make three times the rent and the landlord you apply with stipulates this as a condition, you likely won’t make the cut. Unfortunately, competition for housing is fierce in cities such as NY and LA – but all is not lost.

Here are a few quick scenarios that might help you secure an apartment of your dreams without the three times rent stipulation.

You have a generous landlord

Your ability to rent without three times the income really can boil down to how ‘nice’ your landlord or letting company is. For example, some property owners may simply expect you to show that you have a steady income.

If you can prove your earning potential, too, this may help to secure your apartment. Getting on the good side of a new landlord may also be as simple as providing references from your previous landlords.

Unfortunately, this is probably the most difficult scenario to get right – meaning it’s worthwhile looking for financial support before depending on the kindness of strangers!

You can rent a room, not a property

You might be wondering, “Do I need to make 3 times the rent if I have a roommate?” The answer is that it really depends on how the landlord operates, whether you are the primary tenant on the lease, and the nature of your contract or lease agreement.

In some cases, landlords may expect all tenants in a shared property to make at least three times the rent. In others, however, you may find that only the primary leaseholder (or lead tenant) has to meet this rule.

If you apply as a secondary tenant or a new roommate, you may not have to meet the three times rule. It’s an interesting workaround that can still ensure you live in the city, providing you’re happy to share.

If you’re really lucky and the landlord manages the property as a fully shared property, meaning they rent out the rooms individually to each tenant, you may only need to show three times the rent for your room’s rent!

You can rely on your credit history

In some cases, landlords may be happy to move past the three times rule if you can show your credit and/or debt history. If you’re presently debt-free, it’ll show your prospective landlord that you are more than capable of paying back credit.

A credit check that shows you regularly pay debt back and that you don’t enter arrears will also sit comfortably. 

Apply with a guarantor

A guarantor is someone who can effectively pay your rent for you if you’re unable to at any given moment. It’s a fail-safe option for your landlord, however, you’ll need to make sure you find someone who can pay the amount due just in case you fall behind.

A guarantor lease isn’t always accepted across city apartment rentals, so you’ll need to find an open-minded landlord or letting agency.

I’d also avoid falling back on the guarantor option. If you can find the money to afford three times the rent upfront but can prove your ability to pay in other means, you can at least live without worrying about causing your potential guarantor any debt.

Not all landlords use the three times rule

It’s true! In fact, you may find private landlords only running one small property may be more likely to show leniency.

If you apply for a lease through a major company or a landlord with a large city portfolio, you may find it harder to avoid the three times rules.

You may qualify for housing vouchers

In some cases, if you qualify for housing vouchers (such as the Section 8 in NY state), you may be able to earn less than three times the rent and secure an apartment.

New York’s HCV (Housing Choice Voucher) program helps low-income households and senior citizens access housing without necessarily having the available capital to meet traditional rent demands. It’s also a priority service for disabled people (who may or may not be homeless).

Of course, applying for an apartment expecting three times the rent income with an HCV may be trial and error at first. Be sure to check the official HCV regulations and participating administrators.

Can I still rent a property if my income goes down during a lease?

Providing you can still afford to pay your rent, landlords may still allow you to rent their properties. This may vary from case to case.

If you can prove that you’re looking for new opportunities, it’s extra confidence for your landlord. Unfortunately, the best thing you can do to remedy this situation is pretty obvious – look for more income as soon as you can!

If you’re looking to rent a city apartment, you might be wondering how much is enough to satisfy the average lease agreement. Check out my guide on whether or not $100k is a good salary in the US to learn more about costs of living!

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