Somewhere between San Diego & LA (Los Angeles, San Francisco: mortgage, real estate, debt)

[tilak]

Hi,
Retired professor and spouse from UK considering retiring to the above area. Have $ 800,000 to spend on 3 bed home and annual income of $150,000. All familial commitments already discharged and no longer propose work to earn money!! Will it be hand-to-mouth or can one live in modest comfort in a nice area proximate to the ocean, while mulling over contents of one's library.

[humboldtrat]

This is the San Francisco forum. Try the Los Angeles and/or San Diego forums.

[gizmo980]

I'll move it to the appropriate forum...

Okay, I put it in Los Angeles... let me know (original poster) if you'd rather have it in San Diego or general CA.

[BreaOC]

The area between Los Angeles and San Diego is Orange County. A nice little place for a retired couple near the ocean for $800,000 shouldn't be a problem at all. Don't buy before you move, move here and rent, get a feel for the areas you like the most then buy. Also, most of the country is in a housing recession and the cost of a home will do nothing but continue to go down for the foreseeable future, might as well wait to get a better deal. Best of luck!

[JTGJR]

Welcome tilak! It all depends on what kind of debt you want to take on and how much discretionary income you need/want. By your wording, I'll assume that the $800K is "cash" available for purchase, as opposed to you're preferred home value. So, the question is, how large or small would you like your mortgage payment to be. There are many nice areas between LA and SD that would move you into a 3BR home or condo if you were to pay $800K cash for the property; and you could live very comfortably on your income.

If, on the other hand, you're figuring you can afford a home priced at $800K, that will require about $160K down with a remaining mortgage balance of $640K, which would make things much tighter, if not impossible.

So, it all depends on whether that $800K is cash on hand, or your home value goal.

[tilak]

Thanks guys, useful tips. Will move there first and the house will be paid for in cash.

[the one]

move here and move around the coast. the bay area has a nicer coast if you ask me, but its not as populated as southern cali. it owuld be more rural small town feel in nor cal. but defientely move here and rent. 6 mo's norcal, 6mo's socal. your money is pretty long so you will not have a problem.

[FellowTraveler]

I agree with those who have advised you to rent for six months or so first. I want to emphasize that this is particularly important in your case because you are coming from a foreign country. I moved to SoCal from a foreign country (Canada), and I can tell you that I love it here, but the culture shock you will face is far greater than what someone would face if they were coming from, say, Houston. DO NOT expect it to be even remotely like the UK. For example, I know of not a single butcher shop anywhere in Orange County. There may be a shop that specializes in fine cheese somewhere in OC, but if there is one I have never heard of it. So if you are coming from somewhere where these things are taken for granted, you will be in for a shock.

Because you are foreign, you MUST rent first and travel around the area to see for yourself what parts you like. For example, when I first moved here I picked Orange County because I wanted a slower paced lifestyle. I thought that because it was a large area, it would be full of civic amenities. WRONG! Orange Country is large but it is one giant, "one size fits all" suburb. The only really nice place in Orange County is Laguna Beach, but it is small and the real estate costs there are insane. It didn't take me long after moving here to realize that Los Angeles is a far better place for me than Orange County.

So rent first and see the place for yourself and then decide. And as the others have said, try NorCal as well. I personally think Santa Cruz is wonderful, particularly if you don't need to work. Mendocino is also good I have heard, though I have never been there. If you are retired the world is open to you and there is no reason to restrict yourself to the L.A. area.

One final point: you need to be more specific about the lifestyle you are looking for. It is not sufficient to simply say you have $800K to spend. I can tell you that you have picked a fantastic area in which to retire, but you need to realize that California offers so many different and varied lifestyles within short distances of each other.

Do you want to live mere blocks from the beach? $800K COULD get you a cute beach house in SOME areas, but you will sacrifice space. Is a backyard more important to you? On the other hand, how important is great weather? You can move far inland and have lots of space (i.e. Rancho Santa Margarita), but it will be hotter in the summer and the air will be dirtier. Plus you will have to drive everywhere.

Personally, I am willing to accept the lack of a backyard and smaller space in exchange for the FANTASTIC California beach lifestyle, which includes super-clean damp ocean air, ocean breezes, and cool summer nights. But that is just me. Other people are different. And I didn't even know that I would feel that way until I moved down here. I started out in a boring OC subdivision but when I visited the beach towns, I didn't want to leave them to go home at night, and that's when I knew.

All the more reason to rent first before you commit.

[tilak]

Thanks for all the pointed, useful tips. Will act with due caution on the basis of advice proferred!

[Lovehound]

Originally Posted by tilak

Retired professor and spouse from UK considering retiring to the above area. Have $ 800,000 to spend on 3 bed home and annual income of $150,000. All familial commitments already discharged and no longer propose work to earn money!! Will it be hand-to-mouth or can one live in modest comfort in a nice area proximate to the ocean, while mulling over contents of one's library.

Oh yeah! You should be in good shape! Not great, but good. Your $800,000 will buy a nice house but do not expect it to be on the beach or overlooking the beach. You could probably buy inland in any of the beach cities and get a very nice, comfortable home. Your $150,000 income will make it easy for you to enjoy a very nice lifestyle with no money worries. Heck, you'll probably be buying a new car every other year, eating in the best restaurants, and playing golf 5 days a week!

I recommend you look into the towns north of San Diego up to but not including Orange County. Check out (going south to north) Del Mar, Encinitas, Carlsbad, Oceanside (near San Diego), San Clemente, Dana Point, Laguna Beach (near or in OC). You may also like north of LA: Oxnard, Ventura (Camarillo and Ojai inland), Carpinteria, Santa Barbara and Goleta (college town, UCSB). (Malibu is great but is out of the house price range of the OP.) Anything farther north is out of my area of familiarity.

Good luck! Not that you'll need it.

p.s. I suspect your $800,000 will go quite a bit further in about 2 years since housing prices are expected to continue falling for about that time if not more. Don't be in a rush to buy. Move on out here and rent for a while and see if you like the area enough to permanently settle. Then buy.