Living in Carmel Valley

[CarmelValleyResident]

My wife and I have lived in CV for the last 2 years.
I make around 130k annualy and I am renting for around $1800 in a 2 bedroom apartment. The rent is not high, but even with this income we barely get by. I have 3 kids and just the preschool for one of them is $900 monthly(3 days a week). We have a car payment of $600 and very few other bills. The taxes kill me on a monthly basis. I did get a good tax return back this year, however my tax guy keeps pushing me to buy, buy now etc and “you’ll get all your money back”.

I really want a home, but dont need the $4000 monthly payment ….
You have any recommendations for homes with back yard etc in this neighbourhood than I can rent??
The preschool fees are also outrageous in CV.

Regards,

[zk]

Renting a home here is pretty expensive. Usually anywhere from $2800-$5000/mo. Sometimes a cheaper one will come on the market, and you’ve got to jump on it fast. Check craigslist and the Union-Tribune every day. Have a rental agency (or 2 or 7) be looking for you and ask them to call you as soon as something inexpensive comes up. Check the MLS every day (or have a realtor do it), also. There are some rentals on there. Check anywhere else you can think of.

Before you rent a house, you should try to be familiar with the rental market. You should have a good idea of what any particular house should rent for.

Then, when you find one at a bargain, get over there that day. Tell them how stable you are, how much money you make, what a great tenant you’ll be, that you’ll be staying a while, your wife loves to vacuum and clean, your kids will love the house, etc. I’ve seen a few houses for rent below market value, and there were hordes of people wanting to rent. So get in there and be the one.

[SD Realtor]

CarmelValleyResident –

I feel your pain… If you guys are struggling with an 1800 payment I would not recommend buying. Obviously your tax guy is pointing out the benefits of the interest deduction if you purchase a home. However if you do not have a big chunk of money saved for a downpayment, and you purchase a home, you most likely will be setting yourself up for a potential problem down the road. Whatever you do, do NOT ever buy something you cannot afford. Do you have anything saved up for a downpayment? Would you consider a less expensive neighborhood then CV? Agreed with the previous post, keep your eyes open on Craigslist for a cheaper alternative with regards to renting. That preschool fee of 900 a month is the tough nut to crack. As a parent I know there are few/no alternatives there.

SD Realtor

[mixxalot]

I agree- renting is way cheaper now until prices deflate and the housing market has corrected itself. I believe in the dead cat bounce theory that it will take at least 3-4 years to bottom out.

My situation is sticky due to tech field and all of the massive layoffs and outsourcing of jobs to China and India. I dont wanna be stuck in a mortgage payment until I have a ton of cash in the bank and stable work.

[blahblahblah]

Step 1 — get rid of that car payment, by hook or by crook. That’s $7200/year there and in your tax bracket that means you probably had to earn at least $10000 worth of salary just to make those payments. Take half of that amount, $5K and buy a used Honda. It will last you for years and you will have just given yourself a $10K/year raise.

Step 2 — start a home-based business for either yourself or your wife. What do you guys enjoy doing? Try to figure out some way to earn a little extra income out of it. It doesn’t have to be a lot, because the real reason for this is that you can deduct a portion of your rent as office space for your business. Phone bills, internet, water, electricity, etc… you can write a portion of all of them off. Don’t do anything illegal of course, but if you can come up with a legitimate business for yourself then by all means do it.

Step 3 — Look into tax-free medical and educational savings accounts.

Step 4 — are you maxxing out your 401K? If not that’s the fastest way to both improve saving for retirement and lowering your tax burden in one fell swoop.

Step 4 — save your money and wait for the inevitable collapse.

Please note that I am not a professional financial advisor — although I play one on TV. Caveat emptor. Your mileage may vary. I’m not responsible for any bad advice, etc…

[CarmelValleyResident]

I do have some money saved up and presently I am contributing 10% of earnings to my 401k. I also have 529 set up for my kids. I like the idea of a home based business etc. I just will have to come up with something I can do for a home based business. Any ideas on what part time business my wife and I Can start? Thanks for all the advise folks…..
By the way we really enjoy living in CV.

Regards

[surveyor]

lowering taxes, saving money….

Unfortunately, a lot of the great tax deductions require you to be in real estate (and it is a really good side business as well).

To offset my household’s high salary, I went into out-of-state real estate investing, but that is not something I recommend to newbies. Still, the ability to pay very low taxes is appealing.

I assume you are already taking advantage of your employer’s daycare flexible spending account? That will at least help you defray the cost of daycare (my daycare cost was $10,000 last year, haha).

[Anonymous]

both spouses have to be working, no?

[cowboy]

I would move out of SD. If you don’t own a home now you really have nothing to lose. You can always come back. There are nice places around the country that are 1/4 the price of California real estate. You can even help your tax situation out by going to Texas, Oregon, Washington, etc. Where there are no sales tax, state income taxes, etc.

I mean if you don’t have a home you have to ask yourself, are these outrageous California prices really worth it? Quality of life in Cali is horrid if you didn’t buy a home 10 years ago. Why deal with it?

[mixxalot]

I agree- unless you make 250k plus its not possible to buy a decent home in California. I plan to build a place on some land up north and wait six years for San Diego to implode.

[sdrealtor]

Ted Kaczinski is that you?

[Anonymous]

Idea:

Upgrade your rental to a small home in North County.
Prices I have seen:
$2,000 – Detached townhome type SFR, 1300 sqft.
$2,300 – Detached home, 2000 sqft.
$2,600 – Detached home, 3000 sqft.

[mixxalot]

No its not *chuckle*

But seriously it is way cheaper to buy a few acres of land and build a custom home from scratch. The trick is to have a business or job that allows this which means a lot of travel.

[Author]

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