Fountain Valley is a middle class bedroom community and had 55,313 residents in 2010, according to the U.S. Census. The majority of people who live there commute, and mainly to the Southpark district near the Santa Ana River, which is a new commercial center. Historically, the economy of the city had been based largely on agriculture, but this has now changed as a result of the many office buildings that have emerged. The city is committed to supporting small businesses, encouraging its residents to start their own opportunities. A number of national headquarters are also found in the city, including those for Surefire, LLC, Kingston Technology, D-Link Corporation, and Hyundai Motor America. Most, however, have their offices in the Southpark district.
Fountain Valley Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land space in Fountain Valley, you have two broad choices: buy or lease the land. Naturally, there are pros and cons to both of these choices.
Looking first at buying land, the pros include the fact that:
- You can lease out your land without having any income tax consequences, so long as you pay your income tax on the rent that you receive on the land.
- You become the owner of the land. This means that you have the opportunity to have a truly productive economic use out of the land for a longer period of time.
- You may retain a certain degree of control over how the land can be used and developed. There are usually zoning restrictions in place, which you will have known about before you purchased the land, and 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.
On the other hand, the disadvantages of purchasing land include the fact that:
- If you have leased out your land, it is possible that you might have allowed a tenant to use the land as security for a loan. If the tenant defaults, the land could be at risk of foreclosure.
- You will pay income tax at ordinary rates on any rent you receive. This may or may 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 piece of land.
- You usually cannot borrow against the equity on the land while it is leased to a third party.
Meanwhile, when you lease the land, benefits include the fact that:
- You will have far lower initial development costs, because you do not have to purchase the land.
- You can deduct all your rent payments from your state and federal income taxes.
However, there are some downsides to leasing the land as well, including the fact that:
- Usually, the amount in the long term that you will pay for your lease will be much higher than if you had purchased the property. This is not always a disadvantage, however, as it will depend on whether or not 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, 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 classed as a “diminishing asset”, which means that, towards the end of your lease agreement, your business value will also be decreased.
To help choose between the two options, being aware of the trends and statistics in terms of prices, supply, and demand, can be very beneficial.
Fountain Valley Land for Sale – Trends and Statistics
There are numerous pieces of land for sale in Fountain Valley. These include:
- 18976 Brookhurst Street, for $3,500,000.
- 9064 Edinger Avenue, for $149,900.
- 17220 Newhope Street, for $399,000.
- Magnolia Avenue, for $95,000.
What these figures mainly show is the wide variety of plots that are available in terms of both zoning and in terms of pricing.
Fountain Valley Land for Lease – Trends and Statistics
There is currently no land available for lease in Fountain Valley. This is a clear indicator of the strength of the commercial real estate market in that area.
It should be noted that investing in land, whether for purchase or lease, has a big caveat attached to it, which is that of zoning. In many cases, due to zoning, it is only possible to use a piece of land for a specific goal. While rezoning applications can be considered, these have to be paid for by you and are rarely approved.