The 40x Rent Rule: How New York City Landlords Check Income

In most of the country, landlords talk about making 3 times the rent. In New York City the same idea is stated by the year: your salary has to be at least 40 times the monthly rent. The 40x rent calculator runs the number for any apartment, and this guide explains how the rule works in practice.

The 40x rule

Yearly gross income must be at least 40 times the monthly rent.

Monthly rent	Salary needed at 40x	Salary needed at 3x
$1,500	$60,000	$54,000
$2,000	$80,000	$72,000
$2,500	$100,000	$90,000
$3,000	$120,000	$108,000
$3,500	$140,000	$126,000
$4,000	$160,000	$144,000

To find your own ceiling, divide your salary by 40. A person earning $85,000 qualifies for $2,125 a month.

How 40x compares with 3x

Three times the rent a month is 36 times the rent a year. Forty is more than 36, so the New York rule is the stricter one, by about 11%.

Put another way, 40x equals 3.33 times the rent a month. It also happens to match the federal affordability line that grew out of the Brooke Amendment: at exactly 40x, rent is 30% of gross income. The 30% rule guide shows why those two are the same test.

Why it is stated by the year

Salaried jobs are quoted as yearly figures, and a yearly rule lets an applicant compare the number on an offer letter directly with the listing. Divide the salary by 40 and you have a budget. Brokers and listing sites in the city use the same shorthand.

Roommates

Landlords normally let roommates combine their incomes into one household income. Three people earning $50,000 each have $150,000 between them and qualify for $3,750 a month.

Policies differ on the details. Some buildings want every tenant to be on the lease and screened. Others look for one applicant who qualifies alone. Ask the broker or management office how they treat shares before you all pay application fees.

Guarantors and 80x

An applicant under 40x is usually asked for a guarantor, a person who promises to cover the rent if the tenant does not.

The customary bar for a guarantor is 80 times the monthly rent. For a $2,500 apartment that means $200,000 a year. The figure is doubled because the guarantor has to support their own household as well as stand behind yours.

Many landlords also want the guarantor to live in New York or a neighboring state, which makes the guaranty easier to enforce. If your family is elsewhere or does not earn enough, some buildings accept an institutional guarantor, a company that signs the guaranty for a fee.

What to do if you fall short

The options are the same as anywhere, with a New York flavor:

• Add a roommate whose income brings the total to 40x.
• Bring a guarantor at 80x, or use a guarantor service the building accepts.
• Show liquid assets. Some landlords approve applicants with substantial savings in place of salary.
• Look at smaller landlords, who tend to be more flexible than large management companies.

New York State limits what a landlord can collect up front, so offering several months of prepaid rent or an oversized deposit is generally not available there. The New York Attorney General’s Residential Tenants’ Rights Guide covers the deposit rules.

For the general playbook, see how to rent without 3x income.

Outside New York

The 40x phrasing occasionally turns up in other cities. If a listing outside New York mentions 40x, treat it as you would any other income requirement: it is the landlord’s policy, and it is worth asking whether they would accept 3x with strong credit.

The 3x rent calculator has a 40x button, so you can compare both rules on the same rent.