40% of the land and ranches bought and sold in the United States takes place in the state of Texas.
Unlike most states that have a significant portion of the land owned by various government agencies, 96% of the land in Texas is privately owned and bought and sold on the open market.
We guide our clients through the process of land acquisition from start to finish. It starts with identifying a purchase strategy, whether it is a short term or long term hold. We advise our clients on making the right purchase with a number of factors in mind: location, access, road frontage, amount of usable land, and water and mineral rights. Investment strategies for purchasing land vary, so we assess our clients’ goals and find the best deal for our clients.
Two core investment strategies for our clients acquiring land:
- Long-term hold
We identify potential future development tracts that are in the path of growth and development, particularly in the Austin, San Antonio, Dallas, Houston corridors. We focus on properties that are ideal for development in layout, and in areas with multiple growth points converging upon one another. Ideally, having a river, creek, lake or other potential water source helps the property to retain its value, but also provides an additional exit strategy if needed to sell to an end user buyer for recreational or private use. Returns greatly vary, depending on how long they are held. 2–10+ year holds can vary from 20%–100%+.
- Short-term hold
3 months – 2 years
Many of our clients purchase raw land and improve the land features over a period of time. Improvements may include brush clearing, road development, and water feature creation (dams, lakes, water impounds). Selling the property as a whole, improved, or by subdividing and selling smaller tracts, can also increase the selling price. We see clients make 20% –80%+ returns after improvement costs and expenses.
Holding Costs & Taxes
We guide our clients into a purchase that has minimal holding costs and taxes. In Texas, we agricultural and wildlife tax exemptions enable us to accomplish this. Allowing a local rancher to run cattle on the property, or maintaining habitat and feeding for wildlife, tax exemptions this keep the cost of owning land low for owners with a tax break. Taxes can end up being $200 or less per year. Leasing the land back for cattle, hunting, and recreation can even provide a property income that offsets the cost of roads and other improvements of the property. Although improvements aren’t necessary, we have some clients who just buy property, maintain the tax exemption, and do not do any improvements in long-term property holds.