Newport Beach is one of Orange County, CA’s richest cities. According to the U.S. Census, it had a population of 85,287 in 2010. The Newport Harbor, which is a favorite of recreational boat enthusiasts is located within the city. Meanwhile, not only is Newport Beach rich within Orange County but it is also one of the affluent cities within the US. More than 25% of households in the city have an income of more than $200,000 per year, and the median price for residential homes in the city is more than $1 million, which puts it in 8th place in the entire country.
Pacific Life, a Fortune 500 insurance company, is based in Newport Beach. There are many other large companies in the city, including the largest Mercedes-Benz car dealership in the world, which is Fletcher Jones Motor Cars. There is a very active automotive industry within the city, with several design companies that focus specifically on vehicles operating from there. Top employers in the city include the school system, healthcare providers, the automotive industry, the tourism industry and the local government. Newport Beach has a strong economy and it is very attractive to tourists, who enjoy seeing the multimillion dollar properties, and also the beaches. The Orange County Museum of Art is situated in the city and it hosts various annual boat races that attract people from all over the world.
Income property is commonly purchased by people or companies as investment. The goal is to rent or lease 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, these are known as “nonowner occupied” and they have higher interest rates for mortgages compared to owner occupied properties, because they are classed as high risk.
Newport Beach Income Property for Sale & Lease – Should You Buy or Lease?
With real estate, you usually have two alternatives: buy or lease.
Let us take a look first at the advantages of buying income property:
- In general, monthly expenses do not vary, at least in regards to the amortizations.
- You can claim a number of tax deductions, including property taxes and mortgage interest.
- You will lease out your space in order to earn your income.
- You have the option of using your income property for your own personal use should you not be able to find a lessee.
- You can build up funds that you can use later on, because the property increases in value over time.
Buying has some disadvantages, such as:
- It may be difficult to sell the property when comes the time that you need to liquidate your assets for whatever reason. Selling real estates usually takes several months.
- You need to pay a down payment, which is usually at least 30 percent of the contract price. Thus, you will need substantial funds at the start.
However, with regards to leasing, income property is not commonly suitable for leasing. If you were to lease an income property, then you would do so for your own personal use, turning it into a residential property. As a result of this, the only statistics that should be of interest to you are those of prices, supply, and demand for purchased income properties. On the other hand, we have included the statistics on leasing these properties as well, as those could give you an idea of what you will be able to earn on your property.
Newport Beach Income Property for Sale – Trends and Statistics
- The asking price for income properties in Newport Beach 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 dollar available income properties for sale in Los Angeles-Long Beach-Newport Beach 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-Newport Beach 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 of income property for sale in the Los Angeles-Long Beach-Newport Beach 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-Newport Beach area is 21, which is a 12.2% increase over the past three months, but an 11% decrease year on year.
Newport Beach Income Property for Lease – Trends and Statistics
There are no trends and statistics on potential income earned on leasing out a property that you have purchase. 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 vary greatly. 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 that you could choose.