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Old 05-17-2010, 06:56 PM
 
1 posts, read 2,609 times
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Hi guys, i have a few questions for you. My parents are currently venturing towards Temecula to operate an avocado farm. Looking at some of the costs and profits, i can't see why anyone would do this! It's a 20 acre property with a manufactured home. My parents have decided to rent the house out for ~2400 a month (not shown below) to make up for some of the cost, but use the property to farm on. The yearly expenses and income are as follows (estimated):

Income (annually)
$5,000 from avocado's
$5,000 from flowers
Total: $10,000

Expenses (annually)
$2,000 electricity
$7,000 property tax
$15,000 water
$39,000 mortgage + others
$2,000 home insurance
$2,000 fertilizer
$6,000 labor
$1,000 propane

Total: $~73,000

I'm not sure what from here is tax deductible and what percentage of this is. Can someone please chime in and help us figure this out?
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Old 05-17-2010, 10:50 PM
 
Location: Southern California
3,115 posts, read 7,354,524 times
Reputation: 3672
I don't know anything about farming, but I did grow up in the area and I have two comments!

One, if your parents are expecting to get $2400 in rent from a manufactured home, it must be super-fabulous and gold plated! With a traditional home, yes, that number is definitely possible, but for a manufactured home? I'd suggest doing some research before committing to that number.

And two, most grove owners in the area don't do it for the profit anymore. The community next door, Fallbrook, is known as the avocado capital of the world, but in truth most of the old avocado groves are gone now, since it's just not profitable to grow them here anymore. Most of the remaining groves are owned by people who love the area, love the climate, love having a bit of land around their home, and who don't rely on their groves to produce any income.
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