Placentia is found to the north of California’s Orange County. According to the U.S. Census in 2010, the population was 50,533 at that time, which means that it is a relatively small city. Nevertheless, the census did see a notable increase in population, as it was just 46,488 in 2000. Placentia includes the Atwood community and it is a quiet city and mainly a bedroom community. It was also given the “All America City” award in 1971 by the National Civic League.
In 2013, a $20 million investment was infused into a Metrolink project in the downtown area and this was funded in part by the Orange County Transit Authority (OCTA). This revitalization project will include the construction of new homes, entertainment, retail, and mixed used properties, as well as the train station. There is also the OC Bridges project of the OCTA and the city of Fullerton, which is set to be completed in 2017.
Placentia Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land space in Placentia, be that as an investment or for construction purposes, you have two choices: buy or lease the land.
Let us look first at the advantages of buying land, which include the fact that:
- You can lease out your land without having any income tax consequences, as long as you pay your income tax on the rent that you get.
- You are the owner of a property, which implies that you have the opportunity to make full productive use out of it for a longer period of time.
- You may retain some degree of control over how the land can be used and developed even if you lease it out. There are usually zoning restrictions in place, which you should have familiarized yourself with before you purchased the land, and this means that those who lease from you will only be able to redevelop your property in a certain way.
On the other hand, there are some disadvantages to buying land, which include the fact that:
- It is possible that you, as the property owner, will lease out your land to a tenant who will then use the land as security for a loan that the tenant applies for. If the tenant then defaults, the land could be at risk of foreclosure.
- You will need to pay income tax at ordinary rates on any rent that you receive. This may or may not be a disadvantage, depending on your specific tax situation.
- You must make sure that the lease document that has ground control included in it, or the tenant could potentially completely redevelop the plot.
- You usually cannot borrow against the equity on the land while it is leased to a third party.
If you simply lease the land, there are certain advantages, including the fact that:
- You will have much lower initial development costs, because there is no need for a substantial down payment and other expenses that come with owning a property.
- You can deduct your rent payments from your state and federal income taxes.
But leasing the land also has some disadvantages, including the fact that:
- The amount you spend in the long term that you will pay for your lease will usually be much higher than what you had paid if you purchased the property. On the other hand, this may not be a disadvantage as it depends on whether you intend to be at the same location for a long period of time.
- You won’t have as much flexibility when it comes to how you would like to develop the land that you are leasing. It is possible that this will make it more difficult to run your business in the way that you believe would be the best.
- You will likely not be able to take any equity out of your business or refinance anything due to ground lease limitations.
- Since a lease is a “diminishing asset”, towards the end of your lease agreement, the value of your business will also be considered as diminished.
To help decide which of the two options to go for, being aware of the trends and statistics in terms of prices, supply, and demand, can be helpful.
Placentia Land for Sale – Trends and Statistics
There is just one plot of land for sale in Placentia at present, which is a plot of commercial land at 1000 East Placentia. The asking price for the plot is $950,000 and it is a 0.24 acre piece of land.
Placentia Land for Lease – Trends and Statistics
No land is currently available for lease in Placentia.
It is important to understand that investing in land, be that the purchase or to lease, has a big caveat attached to it, which is due to zoning. In many cases, because of zoning restrictions it is only possible to use a piece of land for a specific purpose. While it is possible to apply for rezoning, this has to be paid for by you and most of the time it is denied.