San Clemente is a city that is located in Orange County, which had a population of 63,522 as of 2010, based on the U.S. Census. It is between San Diego and Los Angeles and it is situated along the coast of California. It is popular because its climate is pleasant, and it offers beautiful views of nature, and Spanish Colonial architecture. It is usually referred to as the “Spanish Village by the Sea”.
In 2010, the U.S. Census found that 64% of the residential homes were owner-occupied while the remaining 36% occupied by tenants. The vacancy rate was 1.3% vacancy for homeowners and 5.8% vacancy for rental properties. The median household income at that time was $87,184, which is slightly lower that the income of $87,200 in 2000. The 2010 census also revealed that 7.9% of the population were considered poor.
San Clemente Land for Sale & Lease – Should You Buy or Lease?
If you want to make use of in land space in San Clemente, you can either buy or lease the land.
The benefits of purchasing the land include the fact that:
- It is possible to lease out your land without incurring any income tax consequences, as long as you pay your income tax on the rent that you get.
- Since you own the property, this implies that you have the opportunity to make full productive use out of it for a lengthy period of time.
- It is possible to retain some degree of control over how the land can be used and developed even if you lease out the land. There are usually zoning restrictions in place, which you should already know before you decided to buy the land, which means that those who lease from you will only be able to redevelop your property in a particular way.
Meanwhile, there are some downsides to buying land, which include the fact that:
- It is possible that your tenant will use the land as security for a particular loan. What this means is that if the tenant defaults on the loan, the land can be foreclosed.
- You will have to pay income tax at ordinary rates for any rent that you receive. This may or may not be a downside, depending on your particular tax situation.
- You must ensure that the lease contract has ground control included in it, or the tenant could redevelop the land in a manner that you do not like.
- You will not be able to borrow against the equity on the land while it is leased to a third party.
Now, if you lease the land, there are certain advantages, including the fact that:
- The initial development expenses will be much lower, because there is no need for a substantial down payment and other costs that usually accompany property ownership.
- You can deduct from your state and federal income taxes the rent that you have paid.
Naturally, there are some disadvantages too when leasing, including the fact that:
- If you calculate the total amount you have spent in the long term for renting the land, this will usually be much higher than the total amount that you have paid if you bought the property. On the other hand, this may not be a disadvantage if you only plan to lease the land for a short period of time.
- You won’t have as much flexibility with regards to what you can do to the land that you are leasing. It is possible that this will make it harder for you to run your business in the way that you prefer.
- It is likely that you won’t be able to take any equity out of your business or refinance anything as a result ground lease limitations.
- Because a lease is considered as a “diminishing asset”, towards the end of the lease agreement, the value of your business will also be decreased.
Let us examine the trends and statistics in terms of prices, supply, and demand, to help in your decision making.
San Clemente Land for Sale – Trends and Statistics
There are numerous pieces of land for sale in San Clemente. Many of those plots are found along N El Camino Real and El Camino Real. They range in price from around half a million dollars to more than $13 million.
San Clemente Land for Lease – Trends and Statistics
Just three plots of land are available for lease in San Clemente. These are found at:
- 139 Avenida Grenada
- 161 Avenida Vaquero
- 130 Avenida Serra
Prices have not been listed.
It is important to observe that when investing in land, whether you buy it or you lease it, there is the issue about zoning restrictions that much be taken into account. Because of such restrictions, it is usually only possible to use a piece of land for a specific purpose. You can request for a rezoning, but you will need to pay for such a request and the sad fact is that this is often denied.