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Calculating Salary and Rent

Your rent and salary are two of the three factors that you can use for calculating your rent-to-income ratio. Rent-to-income computations mostly include utilities paid by the tenant, since they can sometimes have a more significant effect on the average expenditure per month for your housing. Rent-to-income ratios are typically expressed as percentages.

No fast and hard rules are applicable to the supreme rent-to-income ratio, since salaries and housing expenses widely vary across the United States. The ratio may be used by landlords for determining whether or not a potential renter can afford the rent.

Firstly, when calculating salary and rent, you must get the sum of your gross salary per month. If your pay differs from one month to another, add many months or more then divide the average by the number of months in order to get a total.

Secondly, add the average apartment rent to the totals of utility to be paid by the tenant. Thirdly, divide the Step 2 total by the Step 1 total to determine your rent-to-income ratio. For instance, if your total gross monthly income is $3,000 and your utility and rent total is $850, your rent-to-income ratio equals 28.3 percent or 0.28.