Question

You should be able to spend a little over 1/4 of your gross monthly pay on rent.

True or False?

Answer 1

True. Rent should be at least 28% of your gross monthly pay, so yes, it should be a little over 1/4.

Explanation:

The equation is Monthly Gross Pay = 18,240 / 12 = $1,520

Maximum Rent = (0.28)(1.520) = $425.60

Answer 2

Yes this is true. Renting payment scheme should work when you're capable to spend 1/4 of your gross monthly pay. This is 25-30% of your gross salary intended for rent. This is how landlords approves you to rent on his/her property, however there are other places which would required a benchmark amount. For example in New York, you will not be able to rent unless your gross annual salary is at least 40-48x of the monthly rent.