The phrase represents a calculation often used to gauge affordability in the rental housing market. It indicates that a prospective tenant’s gross monthly income should be at least 2.5 times the amount of monthly rent for a particular property in their desired geographic location. For example, if the monthly rent for an apartment is $1,000, the recommended minimum gross monthly income would be $2,500.
This calculation serves as a preliminary indicator of financial suitability for renters. Landlords and property managers frequently employ this guideline to assess an applicant’s ability to consistently meet rental obligations. Historically, such rules of thumb have evolved from lending and financial management practices, offering a relatively simple benchmark for evaluating financial risk in the rental sector. Adhering to this income threshold can reduce the likelihood of late payments or default, benefitting both the tenant and the landlord.
