Tustin is found within the Los Angeles metropolitan area and is part of Orange County, California. It is a relatively small city, having only 74,540 residents in 2010. In 2009, Forbes had included Tustin among the top 25 towns in America to live well in. This is because it is among the top 10% for sole proprietors and startups per capita, and it has one of the shortest commutes in Southern California. Residents are usually employed in the education system, the health care system, and manufacturing companies.
However, the median household income in 2010 was just $74,011 and 12.2% of the population were living below the poverty line. While the household income had actually increased from the $55,985 in 2000, only 8.5% of the population were below the poverty line at that time. As such, while classed as a good place to live well, many residents of Tustin might disagree. This is in part due to the high cost of living due to it being in Orange County, and otherwise very affluent area.
Tustin Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land space in Tustin, you can either buy or lease. There are pros and cons to both of these options.
Looking first at buying land, the advantages include the fact that:
- You can lease out your land without any income tax effects, so long as you pay your income tax on the rent that you receive on the land.
- Since you are the owner of the land, you have the opportunity to have a truly productive economic use out of it for a long time.
- There are usually zoning restrictions in place, which you will have known about before you purchased the land. This means that those who lease from you will not be able to redevelop your property in a way that you do not want them to.
Meanwhile, the disadvantages of buying land include the fact that:
- It is possible that you, as the property owner, will lease your land out to a tenant and inadvertently allow the land to be used as security for the financing of the tenant. If the tenant defaults, the land could be foreclosed.
- You will need to pay income tax at ordinary rates on any rent that you receive. This may or many not be a disadvantage, depending on your personal tax situation.
- You must ensure that the lease document has ground control included in it, or the tenant could potentially completely redevelop the land.
- You usually cannot borrow against the equity on the land while it is leased to a third party.
If you simply lease the land, the benefits include the fact that:
- You will have much lower initial development costs, because you don’t need to pay for a down payment.
- You can deduct all your rent payments from your state and federal income taxes.
On the other hand, the downsides of leasing the land include the fact that:
- The amount in the long term that you will pay for your lease will be tend to be higher than the amount for purchasing the property. This may not be a disadvantage because it depends on how long you intend to use the land.
- You won’t have as much flexibility when it comes to how you would like to develop the land that you are leasing, and this may make it more difficult to run your operations in the way you want to.
- You will probably not be able to take any equity out of your business or refinance anything due to ground lease limitations.
- A lease is considered to be a “diminishing asset”, which means that, towards the end of your lease, your business value will also decline.
Below are the trends and statistics in terms of prices, supply, and demand, to help in your decision making.
Tustin Land for Sale – Trends and Statistics
There are several pieces of land for sale in Tustin. Some of those plots of land are also available for lease, giving people a choice in the matter. One plot of land is 305-315 C St, which is priced at $1,400,000.
Tustin Land for Lease – Trends and Statistics
There are numerous plots of land for lease in Tustin. These range from around 87,120 sq.ft. to several million. Prices vary tremendously, and some commercial real estate brokers will not list prices at all, but instead require people to contact them for further information.
It should be pointed out that when investing in land, whether purchasing or leasing, the issue of zoning has to be considered. In many cases, due to zoning, it is only possible to use a piece of land for a particular purpose. While you can apply for rezoning, this will entail some expenses and such requests are rarely approved.