For anyone looking to invest in real estate, Texas is one of the best places to do so — and we clearly aren’t the only ones who think so. Around 40% of all land and ranches bought and sold in the United States are in Texas, in large part due to the perfect blend of quantity and quality you will find in the Lone Star State.
Not only does Texas boast a diverse topography, but it also provides a plethora of options: whereas most states have a significant portion of land owned by various government agencies, 96% of Texas land is privately owned and bought and sold on the open market.
Ranch and Land Investing with TexasLand
At Texas Land, we offer a comprehensive approach, guiding our clients through the process of ranch and land investing from start to finish. We take great pride in scouting out the best available properties by previewing over 300+ ranches a year. This allows us to efficiently find a match for our buyers needs. We also help identify a purchase strategy, whether it be a short-term or long-term hold. Beyond the purchase itself, our team stays involved with buyers long after the sale to offer guidance on improvements to the land and connect them with reputable contractors and vendors. For us it’s not just about finding the right investment, it’s about doing everything we can to help to ensure you’ve made a solid investment.
Our clients come to us because they trust us with their investments, and we believe those investments should pay off. While there are few investment strategies sounder than real estate — especially in Texas, where the majority of land purchases come with the potential for agricultural and/or wildlife exemptions — we never want to see a client overextend their resources.
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. Not only will those factors dictate how the land might be used or developed, but they also speak to the passive value of the land over time. Strategies for investing in land will always vary, so we assess our clients’ goals on an individual basis and help them find the best deals.
There are two core investment strategies for our clients acquiring land:
We identify parcels that are in the path of growth and development, particularly in the Austin, San Antonio, Dallas and Houston corridors. We focus on properties that are ideal for development in layout, and in areas with multiple growth points converging upon one another. Having a river, creek, lake or other potential water source helps the property to retain its value, but it also provides an additional exit strategy if needed to sell to a buyer for recreational or private use. Returns vary greatly, depending on how long they are held. Two to 10+ year holds can vary from 20% to 100%+.
3 months to 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 and 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% to 80%+ returns after improvement costs and expenses.
Holding Costs & Taxes
Whatever the client’s goal, we want to guide them to a purchase with minimal holding costs and taxes. This is easier to do in Texas, where most land has the potential for agricultural and wildlife tax exemptions. Regardless of the client’s long-term plans for a property, whether allowing a local rancher to run cattle on the property or maintaining habitat and feed for wildlife, the associated tax breaks can go a long way to keep the cost of owning land down.
With the proper exemptions, taxes can end up dropping to $200 or less per year. In addition to the tax breaks, agricultural and wildlife use can provide a property with extra income to offset the cost of developing the property for a better value down the road.
If you’re ready to get started investing in land, contact us today.