What Is the 30% Rule for Apartments?

It's the maximum percentage of your income that you're supposed to spend on apartment rent.

If you have looked for an apartment in the past or are beginning to look now, you may hear someone suggest the "30% rule" to you and wondered what it is. It's pretty simple - the 30% rule is the maximum percentage of your monthly income that some financial experts recommend you spend on your monthly rent.

The 30% in question refers to your gross monthly income, or the top-line amount that you are technically supposed to receive. It is not your take-home pay.

Should you use the 30% rule?

It's for you to decide. There's certainly no universal agreement that the 30% rule is the absolute right way to budget. However, it's certainly a time-worn rule of thumb, so it's not completely without merit.

Many apartment complexes use a version of this rule on their lease applications. You may see requirements that you make 2.5x or 3x the monthly rental amount in order to be accepted.

However, the truth is that the lower your rent as a percentage of your income, the better. If you can find a place that works for you and your life situation for 25%, 20%, or even lower, you should seriously consider taking it. At the end of the day, you want the least amount of stress associated with your rent payment as possible, and having a place to live is more important than having access to a nice pool.