1. Evaluate long-range historical trends and market projections: A qualified land specialist like those at Mock Ranches can help you determine the best time to buy, and the price you should be willing to pay in order to achieve the desired return.
2. “Location, location, location” also applies to land investments. Transitional land near a city will typically have a higher initial cost, but the opportunity for rapid appreciation over a short period of time is higher than land in a remote rural market. Waterfront properties tend to hold value and appreciate.
3. Room for creativity: What basic land improvements like roads, fencing, brush removal or water can be made to increase land values? Investors should go easy on elaborate improvements like highly customized homes, fancy horse barns or facilities. Buyers will want to make it their own, so investors should simply prepare the canvas for them. While basic land improvements generate a high ROI, more specialized properties are harder to sell.
4.Get to know the land intimately: Nothing beats a day spend outside hunting, fishing, riding horses or preparing the land. Spending time on the land will allow you to learn the key features that make it unique and familiarize yourself with layout. Maps can be very useful tools when learning a property.
5. Easements and access: It is important to fully understand any easements to or through the land that could impact privacy or future use. Is there a road to the land? Is it paved, dirt, or gravel? How easy will your land be to access? Is there and easement to the land, or are there easements through it? Who else has access to the land and what are their rights. A detailed title report prepared by a title company that understands land transactions is extremely valuable. Alamo Title in Boerne, TX is a good place to start
6. Understand Property Taxes: What are your options for property taxes, and who is collecting them? Texas landowners can qualify for huge property tax reductions under the 1-d-1 Open Space Tax Valuation. This is earned by managing your property for agricultural use, wildlife management, bees, or timberland. This reduced rate can be as much as a 99% reduction in property taxes which lowers the cost of ownership for investors. There are many professional firms to consult with landowners. Contact us for a free land use analysis
7. Check mineral ownership and production: Production of oil, gas, and other minerals can generate large returns for investors who own the rights to them. Some land can be bought as surface space while someone else owns the mineral rights below the ground. Research historical production in the area and know what you own. We recommend a good mineral attorney like Allen and Associates for a mineral title search, Investors can research production trends per county through the Texas Railroad Commission
8. Deed Restrictions: Are there deed restrictions that would prevent a buyer sub-diving the property or using it for a desired use? Examples of this would be commercial agriculture, mining, industrial use, hunting, or creating impervious cover.
9. Cash or Finance: Savvy investors monitor interest rates and compare those to what return they can make on their cash by keeping it. If rates are low enough, it often times make sense to finance land and keep your cash. Lenders like Capital farm Credit or Crockett National Bank have competitive loan products designed for land buyers.
