How much rent can you afford on $60,000 a year?
Short answer
On $60,000 a year, the 30% rule puts rent at about $1,500 a month (30% of $5,000 gross monthly pay). That is the same line as the common landlord test of income at 40 times the rent. A budget with room to save puts it nearer $1,250.
The math
Start from take-home pay
The 30% rule uses gross pay, but you pay rent from what lands in your account. After federal tax, Social Security, Medicare and any state tax and benefits, $60,000 might leave roughly $3,750 to $4,000 a month. Check your own pay stub and test the rent against that number.
- Salary$60,000
- Gross pay per month (÷ 12)$5,000
- 30% rule$1,500
- 25% for room to save$1,250
- Landlord 3x test (÷ 3)$1,667
The numbers
Rent by salary
| Salary | Monthly gross pay | 25% of gross | 30% of gross |
|---|---|---|---|
| $50,000 | $4,167 | $1,042 | $1,250 |
| $60,000 | $5,000 | $1,250 | $1,500 |
| $70,000 | $5,833 | $1,458 | $1,750 |
Rules of thumb, not a lender or landlord decision. Take-home pay range is a rough guide; your withholding and state tax change it.
Count the costs that come with the place
Utilities, internet, renters insurance, parking and a longer commute all come with the address. A cheaper apartment with expensive utilities can cost more than it looks. Ask the landlord or current tenant what bills usually run.
If rent is more than 30%
In expensive cities many people pay more than 30%. If you do, keep the rest of the budget tight: a roommate, lower car costs, and automatic savings on payday so the rent does not crowd out your emergency fund.
Try your own numbers
Questions people ask
Is $1,500 rent too much on $60,000?
It is right at the 30% guideline. Whether it fits depends on your debts, taxes and other costs. If you have student loans or a car payment, aim lower.
What is the 40x rent rule?
Many landlords require gross yearly income of at least 40 times the monthly rent. On $60,000 that allows rent up to $1,500. Some use 3 times the monthly rent instead, which works out to $1,667.
Do utilities count toward the 30%?
For your own budget, yes. Add the utilities you pay yourself to the rent before you compare it with your income.
Learn the idea
Other amounts
Sources
General education, not personalized financial, tax or legal advice. Figures are examples. Check current rates and limits before you act.
Get your money plan by email
One step each morning: what to do, why it comes in that order, and one small thing to try. About 5 minutes. Then one short note a week. Free, unsubscribe anytime.