Irvine is one of Orange County’s richest cities. As a planned city in the state of California, it was first developed in the 1960s by the Irvine Company, from where the city got its name. It was incorporated in 1971 and, according to the 2010 U.S. Census, it had a population of 258,386 at that time. In 2016, Irvine was officially named as the city in the country with the largest Asian American plurality. In fact, some 45% of the population falls under this demographic. Irvine has many industries, and these include semiconductor and technology companies.
Irvine Multifamily Property for Sale & Lease – Should You Buy or Lease?
If you are interested in multifamily space in Irvine, whether you want it as an investment or as a business, you have two broad options available to you: buying or leasing. There are pros and cons to both of these options.
Looking first at buying multifamily space, there are various advantages:
- Your costs when it comes to real estate are fixed, which means you have regularity on your business expenses.
- You can get really good tax deductions, including property taxes and mortgage interest.
- You can build up substantial funds through the years because the property is likely to increase in value over time.
However, the cons are substantial as well and include:
- Not having much flexibility. Since you have already purchased the property, it is much harder to get out of it because you will need to find a buyer.
- Having high upfront costs. You will need to shell out at least 30% of the purchase price as down payment. In addition, you will need to take care of maintenance, appraisal, and other property costs.
Your other option is to lease your multifamily space, which also has a number of benefits:
- You can get a prime property, which can boost your reputation.
- You have less money to shell out because you don’t have to pay for a down payment.
- You don’t have to deal with the stresses resulting from problems that come with property ownership.
On the other hand, there are some downsides as well:
- Your costs will be variable, which is mainly caused by rent increases that will occur from time to time..
- You do not build up any equity in the property, since you don’t own it.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, can be very beneficial.
Irvine Multifamily Property for Sale – Trends and Statistics
- The asking price for multifamily properties in Irvine is $314,841.90, which is a 0.7% increase over the past three months, and a 10.5% increase year on year. This is higher than the state ($206,014) and the metro ($254,071.41) area.
- The index of total available multifamily properties for sale in the Los Angeles-Long Beach-Irvine area is 29, which represents a 13.4% increase over the past three months but a 2.5% decrease year on year.
- The index of total number of listings of multifamily properties available in Los Angeles-Long Beach-Irvine is 24, which is a 8.9% increase over the past three months, but a 1.3% decrease year on year.
- The profile view index multifamily property for sale in the Los Angeles-Long Beach-Irvine metro area is 97, which is a 24.9% increase over the past three months, and a 22.5% increase year on year.
- The index of total number of units of multifamily property for sale in the Los Angeles-Long Beach-Irvine area is 21, which is a 12.2% increase over the past three months, but an 11% decrease year on year.
Irvine Multifamily Property for Lease – Trends and Statistics
Multifamily property lease statistics have been made available for the Santa Ana, Anaheim, and Irvine market area, also known as the Santa Ana HMA. The conditions in this market are currently very tight, with a vacancy rate of 4.8%. Since 2010, growth in the number of renter households has outpaced not just the construction of new multifamily properties, but also the conversion of existing single family homes into rental units. There is currently a demand for 11,225 new rental units, but only 2,900 will be constructed.
At present, multifamily property monthly lease prices vary depending on the number of bedrooms. The starting prices are:
- $1,700 for one bedroom units
- $2,100 for two bedroom units
- $2,600 for three bedroom units
These prices are reflective of how affluent the HMA is. However, the fact that demand for rental is now so high also shows that people continue to struggle economically and are unable to qualify for a mortgage.