Real-estate investor Nick Perry, who owns over 100 houses, shares four rules for buying a home: keep housing costs below 28% of gross income, total debt under 36%, put down 20%, and buy a house worth no more than three times your annual income.
Here's the 4 ways to know exactly how much you can afford to spend on a house. Look, I own over 100 houses, so I would like to think I know what I am talking about. Number 1, keep housing costs like mortgage, taxes, insurance, HOA under 28% of gross income. Number 2, keep total debt under 36%. That includes car payments, student loans, and credit cards. Number 3, if you can't put 20% down, you can't afford the house. Number 4, keep the home price under 3x your annual income.
