Mission Viejo is a city in California’s Orange County. It is a master planned community, and one of the largest in the U.S. to have been built in a single project. According to the U.S. Census of 2014, some 96,346 people lived there at that time. The city has a suburban culture and nature, with many residential properties. It is a beautiful city, which was officially recognized by the National Arbor Day Foundation for its tree lined neighborhoods. The vast majority of the residents work outside of the city, mainly in education, health care, and retail. The city itself is home to just a small handful of shops, and a few small office properties.
Income property is the type of property that people or firms purchase and, sometimes, develop on. The goal is to rent out the property until it appreciates in price, after which they sell it again. Income property is often commercial, although it can also be residential. In the latter case, financial experts speak of “nonowner occupied”. For these properties, higher interest rates than owner occupied mortgages can be asked, because they are classed as high risk mortgages. In Mission Viejo, almost all income properties are residential properties.
Mission Viejo Income Property for Sale & Lease – Should You Buy or Lease?
If you are interested in income property, you have two options: buying or leasing.
The benefits of buying income property include the fact:
- That your expenses remain constant, at least when it comes to the mortgage payments.
- That you can get substantial tax deductions, including property taxes and mortgage interest.
- That you have the option of using your income property for your own personal use should you not be able to find a lessee.
- That you can build up a large equity, as the income property is likely to appreciate in value over time.
On the other hand, there are some disadvantages to buying income property, such as:
- Income property is really not liquid. It can take several months to complete a sale even when you have a seller’s market.
- You need to invest substantially at the start, primarily because of a 30% down payment that is required. You will also have to take care of maintenance, appraisal, and other property management expenses.
- The usual landlord issues, such as having a tenant from hell, possible changes to the tax code that could wipe out your tax benefits, and possible problems in the neighborhood that could make potential renter shy away.
Income property is usually not leased. However, some owners may allow you to sublease, so the option of leasing an income property for the purpose of having some cash inflow is possible.
The benefits of leasing include:
- It is much easier to transfer to another location and property, subject to restrictions in the lease contract.
- You have less costs and concerns compared to when you own the property.
The cons of leasing include:
- You have restrictions on what you can do to the property.
- Your rental expenses would gradually rise.
- You don’t accumulate equity.
Mission Viejo Income Property for Sale – Trends and Statistics
- The asking price for income properties in Mission Viejo 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 income properties for sale in Los Angeles-Long Beach-Mission Viejo 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 income properties available in Los Angeles-Long Beach-Mission Viejo is 24, which is an 8.9% increase over the past three months, but a 1.3% decrease year on year.
- The profile view index income property for sale in the Los Angeles-Long Beach-Mission Viejo 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 income property for sale in the Los Angeles-Long Beach-Mission Viejo area is 21, which is a 12.2% increase over the past three months, but an 11% decrease year on year.
Mission Viejo Income Property for Lease – Trends and Statistics
There are no trends and statistics available on potential income earned on leasing out a property that you have bought. This is in part due to the fact that you could purchase a vast array of different types of properties, and their monthly lease amounts can vary substantially. Investing in income property is one of the commercial real estate investments most likely to give you the highest possible returns if managed properly. At the same time, it is one of the most complicated options out there, due to the variety of opportunities available to you.