If New York City is notorious for one thing, it’s the cost of living. While rental discounts abound these days, it’s always smart to pause and ask yourself, “How much rent can I afford?” In essence, the key to financial happiness for a renter is understanding your rent to income ratio. This will help you create a sustainable budget that leaves cash left over for fun stuff, like travel, dining out, and multiple streaming services. Below, real estate experts share tips for securing your dream apartment — affordably.

Manhattan Rentals Under $2,500 on StreetEasy Article continues below

Hell’s Kitchen

554 West 50th Street

$2,276 No Fee

1 |

1

Central Harlem

252 West 149th Street

$2,225 No Fee

2 |

1

Yorkville

401 East 89th Street

$2,475 No Fee

1 |

1

South Harlem

115 West 117th Street

$2,500 No Fee

Studio |

1.5

Hell’s Kitchen

537 West 49th Street

$2,300 No Fee

1 |

1

Yorkville

306 East 83rd Street

$2,200 No Fee

1 |

1

Upper West Side

148 West 80th Street

$2,500 No Fee

1 |

1

East Harlem

334 East 105th Street

$2,500 No Fee

2 |

1

East Harlem

340 East 105th Street

$2,500 No Fee

2 |

1

Lower East Side

150 Orchard Street

$2,450 No Fee

Studio |

1

Manhattan Valley

7 West 103rd Street

$2,100 No Fee

Studio |

1

Yorkville

1670 York Avenue

$2,100 No Fee

Studio |

1

How Much Rent Can I Afford? The 40 Times Rent Rule

Many landlords, brokers, and property managers subscribe to this rule. Typically, your gross annual income should equal 40 times your monthly rent — that’s your rent to income ratio. The following example crunches the numbers: For an apartment that costs $2,500 per month, the renter’s gross income should be $100,000 per year. And of course, proof of salary will be required.

Still a bit fuzzy about the numbers? Just take your annual income, before taxes, and divide it by 40. That’s your total. Now, when you wonder “How much rent can I afford?” you’ll know the exact answer.

Here’s another way to look at the math: You should spend no more than 30% of your income on rent. To calculate, multiply your gross annual income by .30 and then divide it by 12. You will end up with the same number as the 40 times rule.

Are There Exceptions to the Rule?

If you have an excellent credit history, some landlords are willing to bend the 40 times rent rule. On the flip side, some buildings actually require an even higher income, sometimes 50 times the monthly rent.

“If an apartment is independently owned, or owned by a smaller entity, there may be some flexibility,” says Ivana Tagliamonte of Compass. “For example, I’ve seen many instances where perhaps the tenant does not meet the income requirement of 40 times the rent but has excellent credit, no liabilities, and a solid amount of money in the bank. Often, with smaller landlords, applications are viewed case-by-case.”

Brooklyn Rentals Under $2,500 on StreetEasy Article continues below

Greenwood

643 Sixth Avenue

$1,995 No Fee

Studio |

1

Flatbush

561 East 26th Street

$2,500 No Fee

2 |

1

Bushwick

287 Cornelia Street

$2,175 No Fee

1 |

1

Flatbush

1471 Nostrand Avenue

$2,400 No Fee

1 |

1

Midwood

1792 Ocean Avenue

$2,429 No Fee

1 |

1

Flatbush

286 Linden Boulevard

$2,495 No Fee

1 |

1

Williamsburg

53 Graham Avenue

$2,400 No Fee

1 |

1

Prospect Heights

195 Underhill Avenue

$2,498 No Fee

Studio |

1

Crown Heights

2303A Pacific Street

$2,350 No Fee

2 |

1

Bushwick

820 Wyckoff Avenue

$2,495 No Fee

1 |

1

East Flatbush

824 East New York Avenue

$2,400 No Fee

1 |

1

Prospect Park South

1620 Caton Avenue

$2,395 No Fee

Studio |

1

Consider a Guarantor

What can you do if you can’t get around the 40 times rule? It’s time to find a guarantor. What is a guarantor? A guarantor is someone who is legally obligated to pay your rent if you cannot.

Queens Rentals Under $2,500 on StreetEasy Article continues below

Briarwood

142-10 Hoover Avenue

$1,750 No Fee

Studio |

1

Elmhurst

90-02 Queens Boulevard

$2,500 No Fee

1 |

1

Glendale

65-05 Central Avenue

$2,100 No Fee

1 |

1

Astoria

25-21 31st Avenue

$2,350 No Fee

1 |

1

Astoria

28-23 42nd Street

$1,812 No Fee

1 |

1

Sunnyside

45-56 42nd Street

$2,375 No Fee

1 |

1

Jamaica Estates

87-01 Midland Parkway

$1,675 No Fee

Studio |

1

Beechhurst

160-40 13th Avenue

$1,700 No Fee

1 |

1

Forest Hills

75-37 113rd Street

$2,150 No Fee

1 |

1

Rockaway Park

117-12 Ocean Promenade

$1,799 No Fee

1 |

1

Astoria

34-30 42nd Street

$2,400 No Fee

2 |

1

Oakland Gardens

73-51 Bell Boulevard

$2,100 No Fee

1 |

1

What About Brokers’ Fees?

Monthly rent isn’t the only cost to consider when asking yourself, “How much rent can I afford?” For some apartments, you also have to pay a broker’s fee, which can run around 15% of the annual rent.

It’s definitely possible to find apartments without a broker’s fee, though. Try searching for no-fee apartments on StreetEasy.

More Costs to Consider Besides Rent to Income Ratio

There are a couple more costs to remember when wondering, “How much rent can I afford?” For example, many landlords require tenants to pay the first and last month’s rent up front, in addition to a security deposit. 

“I would also consider transportation costs, especially if you find a great apartment that’s far from the subway,” Tagliamonte says. “An affordable studio may not actually be affordable if you’re spending a fortune on Ubers.”

Rent Concessions

Something else to watch out for? Rentals that offer discounts on the first year’s rent, such as rent concessions or net-effective rent. While these apartments initially look like they’re within your budget, the second year will provide an unfortunate shift. “With a lot of rent concessions out there, people can get a little bit sidetracked,” says Feldesman. “When those incentives no longer apply to the second year’s rent, you may discover you can’t afford your apartment anymore.”

Taking all these factors into consideration should help you figure out the right amount of rent for your budget, this year and beyond.

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Whether you’re looking to rent or to buy, find your next NYC apartment on StreetEasy.