Calculate Affordability Budget Bottom Line: What Can you Afford?
Living in the city that never sleeps comes with a price tag to match the skyline. Use this handy formula to find out what you can afford to spend monthly on rent. It’ll help you budget like a pro and focus your housing search.
Inside scoop: NYC landlords will want to see that your income is at least 40 times the amount of your monthly rent.If you’re living with roommates, you can total your salaries to meet the minimum! If you still need a boost to meet the income requirements, you may need a guarantor—but there are still plenty of options to help you get there.
Total Yearly Income + 40 = Monthly rent
Example: Jacinda and Alex are applying for an apartment together! Jacinda earns $50,000/year and Alex earns $35,000/year. Their combined total yearly income is $85,000.
$85,000 ¸40 = $2,125. Their budget is $2,125 combined monthly rent. If they’re going in halfsies—each of them would be responsible for $1,062.50 each month.
Alternately: you can take the price of an apartment and multiple it by 40 to see what income you will need to prove in order to qualify.
Example: Jess has found the perfect UWS apartment for $2,800/month. They will need to meet the 40x income requirement of $112,000/year either by themselves or by utilizing a guarantor.
Monthly rent cost x 40 = Income/year needed to qualify
Also remember to budget for the security deposit and sometimes a brokers fee.