Enter the total monthly rent and the total gross monthly income into the calculator to determine the income rent ratio.
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Income Rent Ratio Formula
The following formula is used to calculate an income to rent ratio.
IRR = MI / MR
- Where IRR is the income rent ratio
- MI is the monthly gross income
- MR is the monthly rent
Income Rent Ratio Definition
An income to rent ratio is a measure of the total take home gross income to the total monthly rent paid for a house or apartment. It’s used to analyze the percentage of income is spent on rent.
Income Rent Ratio Example
How to calculate an income rent ratio?
- First, determine the total monthly income.
Calculate the total gross monthly income.
- Next, determine the total monthly rent.
Calculate the total spent on rent monthly.
- Finally, calculate the income rent ratio.
Calculate the income rent ratio using the formula above.
For most people or families an income rent ratio of 3 or more is recommended.