What is the 40x rent rule?
The 40x rule compares your yearly gross income to one month of rent. Where the rest of the country talks about making 3 times the rent a month, New York City listings say 40 times the rent a year.
salary needed = monthly rent x 40
highest rent you qualify for = yearly salary / 40
A $2,500 apartment needs $100,000 a year, which is $8,333.33 a month or $48.08 an hour full time. A $1,500 apartment needs $60,000.
40 times the rent chart
The salary needed at 40x for common rents, with the 3x monthly figure next to it for comparison.
| Monthly rent | 40x a month | 40x a year | An hour, full time | 3x a month |
|---|---|---|---|---|
| $800 | $2,666.67 | $32,000 | $15.39 | $2,400 |
| $1,000 | $3,333.33 | $40,000 | $19.24 | $3,000 |
| $1,200 | $4,000 | $48,000 | $23.08 | $3,600 |
| $1,300 | $4,333.33 | $52,000 | $25.00 | $3,900 |
| $1,400 | $4,666.67 | $56,000 | $26.93 | $4,200 |
| $1,500 | $5,000 | $60,000 | $28.85 | $4,500 |
| $1,600 | $5,333.33 | $64,000 | $30.77 | $4,800 |
| $1,800 | $6,000 | $72,000 | $34.62 | $5,400 |
| $2,000 | $6,666.67 | $80,000 | $38.47 | $6,000 |
| $2,500 | $8,333.33 | $100,000 | $48.08 | $7,500 |
| $3,000 | $10,000 | $120,000 | $57.70 | $9,000 |
40x is the 30% rule in disguise
Twelve months of rent divided by 40 months of rent is 0.30. So an applicant who earns exactly 40 times the rent spends exactly 30% of gross income on it, which is the federal affordability line set after the Brooke Amendment. The 3x rule lets rent reach 33.3%.
That makes 40x about 11% harder to pass than the 3x rent rule. On $2,500 rent the gap is $10,000 of salary. The 40x rent rule guide covers how New York landlords verify income and what they accept in its place.
Guarantors and the 80x rule
An applicant under 40x is normally asked for a guarantor. The usual bar for that person is a yearly income of 80 times the monthly rent, double the tenant's requirement, because the guarantor has housing costs of their own. For $2,500 rent that is $200,000.
Roommates can usually pool their salaries, so the test is run on household income. If the combined figure still falls short, the guide to renting without enough income lists the other routes.