Placentia is found to the north of Orange County in California. According to the U.S. Census, it had a population of 50,533 in 2010, making it a relatively small city, although that was quite an improvement when considering that its population was only 46,488 in 2000. This is a quiet, mainly bedroom community, that was the recipient of the “All America City” award in 1971, which was given by the National Civic League.
The Metrolink project was started in 2013 in downtown Placentia. This was partially financed by the Orange County Transit Authority (OCTA) and its purpose is to revitalize the area with the addition of new homes, entertainment, retail, and mixed used properties, as well as the train station. The city is also working on the OC Bridges project in collaboration with the OCTA and the city of Fullerton. This is due to be completed this year, 2017.
Placentia Multifamily Building for Sale & Lease – Should You Buy or Lease?
If you are interested in multifamily space in Placentia, the usual options are to either buy or lease.
Buying multifamily space will provide certain benefits, such as the fact that:
- You have more than one “door” (as the industry refers to it) to rent out. This means that you don’t have as much risk of not having any income at some point. Furthermore, having multiple doors helps you to spread the cost of potential capital improvements and repairs.
- If you have at least four doors within your property, you can access different forms of finance. The income that the property can bring in will be a main factor when you apply for financing for this type of property. A loan guarantee is usually required, and you will need to have the right amount of reserves and the right resources.
- It is very convenient, because you only have a single location, but multiple properties to look after.
With regards to the cons of buying, these include the fact that:
- You have a larger initial cost than with a single family property, which means need to have greater reserves and down payments. While you do have more income, the expenses are usually higher and they tend to have a domino effect. If one tenant causes a problem, other tenants may also suffer. Should, for instance, one property have a leaking bathtub, the properties below it will also sustain water damage.
- There can be an issue with turnover rates, beyond those experienced in single family units. Turnovers are generally quite costly, particularly if multiple units are affected.
- Having several tenants may mean that you have to deal with many problems as well. This can lead to some disagreements and since you will be the landlord, you may end up being responsible for resolving them. Note that in many locations, property owners are fined by cities and police departments for nuisance calls.
Meanwhile, multifamily properties are usually not available for lease. This is because the owner of the property will look at renting out the different units, rather than the entire property. There are some rare exceptions. For instance, the owner may not have the ability to properly manage such an investment anymore, but wants to hold on to the property regardless. While hiring a property manager is usually the most common solution for this, they may allow others to lease the entire property and to collect the earnings from renting out the individual units.
To determine whether investing in multifamily properties in Placentia is a good way forward, it is important to be aware of the trends and statistics in terms of prices, supply, and demand.
Placentia Multifamily Property for Sale – Trends and Statistics
- The asking price for multifamily properties in Placentia $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) area and the metro ($254,071.41) area.
- The index of total dollars available for multifamily properties for sale in Los Angeles-Long Beach-Placentia 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-Placentia 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 for multifamily property for sale in the Los Angeles-Long Beach-Placentia 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-Placentia area is 21, which is a 12.2% increase over the past three months, but an 11% decrease year on year.
Placentia Multifamily Property for Lease – Trends and Statistics
There are currently no Placentia multifamily properties for lease. This is due to the fact that multifamily properties for lease would fall outside of the realms of commercial real estate. Rather, they would form part of residential real estate, meaning they become occupied either by the owner or by a tenant.