Santa Ana serves as the county seat for Orange County in California. It is also the second most populous city in the county and according to the 2010 U.S. Census, it had a population of 329,427 at that time. That made it the the 57th most populous city in the country. Located in the south of the state, next to the Santa Ana River and just 10 miles from the coast, the city, which was founded in 1869, it is part of the Greater Los Angeles Area. At 18 million residents, this is the second largest metro area in the country. Additionally, Santa Ana has been ranked 4th safest city with more than a quarter of a million residents in this country.
Santa Ana Land for Sale & Lease – Should You Buy or Lease?
If you are interested in land, as an investment or for construction or other purposes, you have two broad options available to you: buying or leasing. There are pros and cons to both of these options.
Looking first at buying land, the pros include:
- 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 property. 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 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.
Meanwhile, the cons are important to consider too:
- It is possible that you, as the property owner, lease your land out to a tenant and that you allow the land to act as security for the financing of the tenant. If the tenant then defaults, the land could be at risk of foreclosure.
- You will pay income tax at ordinary rates on any rent you receive. This can be a disadvantage, depending on your personal tax situation.
- You must ensure that you have a lease document that 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.
Your other option is to lease your land, which also has clear benefits, including:
- You will have far lower initial development costs because you do not have to acquire any land.
- You can deduct all your rent payments from your state and federal income taxes.
On the other hand, there are some downsides as well, including:
- Usually, in the long term, the amount that you will pay for your lease will be much higher than the amount you would pay if you had purchased the property. This is not always a disadvantage, for instance, if you do not 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 considered to be a “diminishing asset”. Thus, which means that, towards the end of your lease agreement, your business value will also be diminished.
To help choose between the two options, it is advisable to be aware of the trends and statistics in terms of prices, supply, and demand.
Santa Ana Land for Sale – Trends and Statistics
There are numerous parcels of land for sale in and around Santa Ana. These include:
- A 0.19 hectare of land for $799,000, which is found in a very exclusive neighborhood, surrounded by various multimillion dollar properties.
- A 0.21 hectare of land for $1,499,000, which is comprised of two pieces of land and one house. The house can be offered for rent at $1,500 per month, and the land can raise a rent of $2,700 per month.
- C2, zoned for commercial development, lots of land in prime location near excellent public transportation routes for $1,499,999.
- A plot of land that is zoned as residential but has commercial use grandfather rights, for $600,000.
- A 0.21 hectare land, which is perfect for people looking to build their own home in the Cowan Heights foothills. It is currently valued at $599,000.
- A 0.11 hectare flat lot for $499,000.
As you can see, there is a wide variety of lots for sale, proposed for a range of different developments. This makes them interesting for many different developers, as well as individual owners.
Santa Ana Land for Lease – Trends and Statistics
There are also various opportunities for those looking for land that they could lease. These include:
- A flexible site plan design of 1.75 acres, zoned as retail land.
- A paved lot measuring 47,916 square feet, zoned for commercial development
- A new planned retail center, measuring between 0.02 and 0.11 acre, with a rate of $30, zoned for retail.
- A ground lease in a busy and densely populated street measuring 0.13 acre, zoned for commercial use or land use.
What these statistics consistently show is that investing in land, whether for purchase or for lease, will require careful consideration because 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, this has to be paid for by you but these seldom succeed.