-
Investing in California Real Estate a Good Idea?
-
So here is a thorough comparison of the cost of living and financial strategies in California and Florida as it relates to you:
California:
Housing:
A nice 2,500-square-foot four-bedroom, three-bath house with a two-car garage in a good school district could cost…
$1.2-2 million in the city (Los Angeles, San Francisco Bay Area).
$800k-1.2 million in the burbs.
$600k-800k farther inland.
Property Taxes: around 1% of assessed value per year.
Utilities:
The average monthly cost is $300-$400.
Electricity is higher than average.
Food:
Groceries for a family of 5: $1000-$1500/month.
Eating out can be very pricey.
Transportation:
Gas prices are some of the highest in the nation.
Car insurance runs about $1500-$2000 per year per vehicle.
Healthcare:
Health insurance premiums can be high, but there’s a good public option (Covered California).
Education:
Public schools vary widely, but they are mostly good options in suburban areas.
Private schools range from $15k-50k/yr/child.
Taxes:
State income tax = 1% to 13.3% (progressive)
Sales tax: 7.25%-10.25% depending on local rates
Florida:
Housing: A similar home could cost…
$600k-1 million in desirable urban/suburban areas (Miami, Tampa).
$400k-600k further out.
Property Taxes: around .98% of assessed value per year.
Utilities:
The average monthly cost is $250-$350.
Electricity is cheaper than in California overall.
Food:
Groceries for a family of 5: $800-$1200/month.
Eating out will generally be less expensive than in CA.
Transportation:
Gas prices are typically lower than in CA.
Car insurance runs about $1800-$2500 per year per vehicle (can be higher than CA).
Healthcare:
Health insurance premiums tend to be lower than those in California.
No state-run health insurance marketplace.
Education:
Public schools vary widely, but they are mostly good options in suburban areas.
Private schools range from $10k-30k/yr/child.
Taxes:
No state income tax.
Sales tax: 6%-8.5% depending on local rates
Financial Strategies and Lifestyle Comparison:
Income:
As a mortgage broker on commission working remotely, your income could be similar in both states. However, Florida has no state income tax so that you would take more money home.
Housing:
You can get more for your Florida housing budget, allowing for a nicer house or better area.
Cost of Living:
Generally lower overall in Florida, which provides more discretionary income.
Savings Potential:
Florida allows for higher savings due to lower cost of living and no state income tax.
Lifestyle:
California offers more diverse landscapes, cultural activities, and the tech industry’s presence. However, these things could be limited by high costs and expenses and curtailing leisure and travel activities. On the other hand, being cheaper in Florida may allow an individual to go on frequent family vacations while dining out often and participating in different recreational activities, making it possible to live a beach lifestyle easily.
Education:
Both states have strong public school systems and many good private schools in suburban areas. However, private education tends to cost less in FL than in CA.
Weather:
California has a Mediterranean climate with mild winters in most parts, while Florida has a subtropical climate characterized by hot summers and occasional hurricanes.
Networking:
The tech/startup sectors are big players here, with many opportunities available, especially around Silicon Valley. However, there are still growth industries elsewhere. Something new is always happening daily related to real estate or tourism, among other things, thus making Florida an ideal place for business networking.
Future Planning:
The absence of state income tax and a lower cost of living in Florida allows for more aggressive savings and investments in your children’s college education and retirement plans.
In summary, California may have some lifestyle pluses and a wider range of work options. Still, Florida is more likely to bring financial comfort to a family of five living on the salary of a mortgage broker. A low cost of living coupled with no state income tax in Florida could relieve much of the financial burden of supporting a family — it may even enable them to live better and save more.