La Habra is found in the northwest portion of California’s Orange County. In 2010, the U.S. Census found that the city had some 60,239 residents. It has a strong economy, with the main employers being CVS/Pharmacy, Wal-Mart, the City of La Habra, Target, Costco, the La Habra Bakery, Kohl’s, The Home Depot, La Habra Convalescence Hospital, Lowe’s, and VIP Rubber. As can be seen, its economy is mostly based on retail and manufacturing.
The median household income in 2010 was $60,954 and 14% of the residents lived below the poverty line, which is actually an improvement compared to 2000, when the median household income was just $47,652, and at least 19.1% of people lived below the poverty line.
La Habra Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land in La Habra, be that as an investment or for construction or other purposes, you have two broad options: buying or leasing. There are pros and cons to both of these options.
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 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 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 property, 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.
Meanwhile, the disadvantages of purchasing the land include the fact that:
- If you lease your land out to a tenant and then allow the tenant use the land as security for a particular loan, the land could be at risk of foreclosure in the event that the tenant defaults.
- You will pay income tax at ordinary rates on any rent that you receive. This can be a disadvantage, depending on your personal tax situation.
- You must ensure you have a lease document that has ground control included in it, or the tenant could potentially completely redevelop the plot of land.
- You usually cannot borrow against the equity on the land while it is leased to a third party.
Your other option is to lease the land, which has advantages including the fact that:
- You will have far lower initial development costs, because you do not 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, there are some downsides, including the fact that:
- Usually, the amount in the long term that you will have paid for your lease will be much higher than if you had purchased the property. This is not always a disadvantage, because it actually depends 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 business 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 reduced.
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.
La Habra Land for Sale – Trends and Statistics
There are not many pieces of land for sale in La Habra. The only plot available for sale at present is found at Russell Street, currently selling for $140,000, which is a 31,799 sq.ft. plot zoned for a single family property.
La Habra Land for Lease – Trends and Statistics
One piece of land that is currently available for lease in La Habra is a plot at 551-555 S Harbor Blvd, which costs $2.52 per sq.ft. per year.
It should be pointed out that when investing in land, whether it is a purchase or a 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 very specific goal. While rezoning applications can be considered, these will need to be paid for by you and they are rarely approved.