Huntington Beach is one of Orange County’s seaside cities. According to the 2010 U.S. Census, this California city had a population of 189,992 at that time, which means it is the most popular beach city in the county, as well as the seventh in the Los Angeles-Long Beach-Anaheim area. The population is certainly growing as indicated by the 200,809 people living there in 2014. It also has a 9.5 mile stretch of beautiful, sandy beach and is perfect for the surfing and beach community. In fact, it is affectionately called “Surf City” and it attracts surfers from various parts of the world.
Huntington Beach Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land, to be used as an investment or for construction or some other purpose, you have two major choices: buying or leasing. Take note that there are pros and cons for both of these options.
Looking first at buying land, there are some benefits:
- You can lease out your land without having any income tax problems, as long as you pay your income tax on the rent that you receive on the land.
- You become the owner of a property. This means you can do anything with it, particularly on using it to produce income.
- You may have a certain degree of control over how the land can be used and developed. There are usually zoning restrictions in place, which you probably have become aware of before you purchased the land. This implies that those who lease from you will not be able to redevelop your property in a way that you do not want them to.
However, the disadvantages need to be considered too:
- You may lease out your land and allow the land to be used as security for the financing of the tenant. If the tenant defaults, the land could be foreclosed.
- You will pay income tax at ordinary rates on any rent you receive.
- You must include ground control in the lease contract, or the tenant could completely redevelop the land.
- You usually cannot borrow against the equity on the land while it is being leased out to a third party.
Your other option is to lease your land, which has some benefits:
- You will have much lower initial development costs, because there is no need to pay a down payment.
- You can include all your rent payments as deductions when filing your state and federal income taxes.
However, there are some downsides as well, including:
- Usually, the total amount you will pay in the long term for your lease will be much higher than if you had purchased the property. This may not be a con if you don’t intend to use the property for a long time.
- You won’t have much flexibility when it comes to how you would like to develop the land that you are leasing. This may make it more difficult to run your operations in the way you want to.
- You will probably not be able to take any equity out of your business or refinance anything due to ground lease limitations.
- A lease is considered to be a “diminishing asset”. Thus, at the end of your lease agreement, your business value will also decline.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, can help.
Huntington Beach Land for Sale – Trends and Statistics
There is currently just a single piece of land for sale in Huntington Beach, and this presents a rare opportunity. The land measures 1.01 acres and costs $5,300,000. The land has been zoned for multifamily property development and is currently vacant. It comes with gas/propane, cable, telephone, water, irrigation, and electricity/power. It has been available since 2013, which is another highly unique feature, as Huntington Beach is not known to have long vacancies.
Huntington Beach Land for Lease – Trends and Statistics
Three leasing opportunities currently exist for land in Huntington Beach:
- A ground lease, build to suit, 1 acre lot that has been zoned for commercial use. The property would suit retail businesses, restaurants, and drive-thru businesses in particular.
- A hard corner 0.41 acre pad. It comes with cross parking rights with the contiguous and popular Goldenwest Marketplace. It has been zoned as a retail-pad.
- Two plots of lands zoned as retail spaces at Meadow Park Plaza, measuring 4,500 and 5,700 square feet. These are found in a neighborhood center, which is a prime location.
It should be pointed out that investing in land, purchase or lease, has a big caveat attached to it, which is due to zoning. In many cases, it is only possible to use a piece of land for a specific purpose. While rezoning applications can be considered, these have to be paid for by you and are rarely successful.
Huntington Beach is not known to regularly have land available, either for purchase or to lease, so anything that becomes available tends to be in high demand. Additionally, any business operations conducted from the land, be that residential, commercial, or industrial development, are often highly successful because Huntington Beach is a prime location. As such, they present very interesting opportunities for investors and developers alike.