Can I Afford an Apartment on What I Make?
Perhaps the most fundamental question that apartment seekers have is how much apartment they can afford based upon what they make. Apartment complexes usually require you to make three times the rent to qualify. This page is here to help you calculate what earnings you need to afford an apartment.
6/11/20262 min read
The very first question to answer when you begin an apartment search is how much apartment you can truly afford. Unless you know the answer beforehand, the early stages of your journey might be quite frustrating.
The general rule of thumb is that you need to make three times as much as the monthly rent.
Although every apartment complex is different, the majority of them use this benchmark as the standard for qualifying your lease application. Some apartments might accept less, but even low-income or subsidized apartment complexes usually expect your wages to be no less than 2.5x the rent amount.
Just to be clear, the earnings amount in question is the gross amount, not your take-home pay. So, don't worry about getting qualified after taxes and other withholding happens.
However, you should expect to have to prove what you're making through the submission of pay stubs, tax returns, or other documents that support your claim. So, if you're just starting a job, you may have to wait a month or two before you can sign a long-term lease.
If your job is in a cash business or you get a great deal of your income from tips, you'll need to keep track of those proceeds so that you can show your income. Even with some of the reforms surrounding taxes on tips, you are still expected to report your tip income, and you're going to have to prove to a prospective apartment complex that you're making enough to afford the rent.
Quick math
Though the mathematics of this situation are straightforward, it is often helpful to run them out before you go tour apartment complexes just to have the relevant numbers in your mind.
So, if you make $3,000/month, you can reasonably expect to qualify for most apartments renting for $1,000/month. If you make $5,000/month, you'll probably be able to get a place for as much as $1,660/month.
On the flip side, you can also take the rent figure and multiply by three to find the minimum qualifying wage to afford the unit. An apartment listed for $1,250/month requires its tenants to make no less than $3,750/month.
You get the idea.
Now, if your earnings are a bit more sporadic or uneven, you may have to do a bit more work before you can put your name down on a lease application. For the most part, you can use the average monthly earnings you have as your base amount.
HOWEVER, be prepared for the fact that you may have to submit 6 - 12 months of pay stubs in order to show that your fluctuating pay is consistently earned. You may also be required to pay a higher deposit or pay off a significant chunk of the lease amount upfront as a hedge against the leaner months you have.
Conclusion
I understand if this article isn't what you wanted to hear. Unfortunately, I meet many people who get excited about apartments that they cannot hope to afford.
With that said, there are always places to live for any budget or need. I don't discriminate - don't be afraid to reach out for help.
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Bart Shirley is a licensed real estate agent (#843214) in the State of Texas. He is an affiliate of C. R. Realty of Katy, Texas, and sponsored by broker Charles Ray (#498579). All commissions earned by aBARTments.com and Bart Shirley are to be issued to C. R. Realty, not Bart Shirley.
C. R. Realty is located at 5604 1st Street #101, Katy, Texas 77493. The office phone number is (832)646-0512.