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Steps to take when investing in Texas land

If you are thinking about investing in Texas land, there are several important details you need to consider for a successful purchase. To help you get started, take a look at the essential steps involved in the process:

  1. Finding an expert real estate agent

    Investing in land can be a tricky process. Avoid making costly mistakes and handle the process the right way by working with an experienced real estate agent. With their extensive knowledge in investing in land, your agent can guide you through each step of the process and help you in making the right decisions.

    When it comes to land for sale in North Texas, Ranch Partners is without a doubt the best team to call. The highly-networked team consists of experienced, competent, and passionate agents who are ready to help you with your real estate investment.

    Get in touch with Ranch Partners at 254.433.2561 or 254.631.3200. You can also send an email to jeffclarktexas(at)gmail(dotted)com.

  2. Apply for a land loan

    Many buyers pay for land in cash. However, if you prefer to finance the purchase with a mortgage, be prepared for some challenges. Since it comes with more risk, a land loan is often more difficult to secure than a home loan. But don’t let that discourage you. These are a few options you can consider:

    • Lender land loans – Loans that are usually offered by community banks and credit unions. These typically require a high down payment of up to 50%
    • Home equity loan – Homeowners who already have existing homes with good equity can use their equity to get a second mortgage for a land purchase
    • SBA 504 Loan – Loans for business owners who want to invest in land and other fixed assets at below-market rates.
    • Seller financing – Short-term financing – typically 5 to 10 years – offered by the seller.
    • USDA Rural Housing Site Loans – A government loan for those who want to build their primary residence in a rural area.

    Other land loans that may come in handy are Agriculture and Land Loans, Timber and Forestry Loans, and Agribusiness Loans. Always shop around for a loan before deciding on the best one for you.

  3. Research thoroughly

    The only way to find the best property for you is through proper research. When searching for properties, keep these factors in mind:

    • Location, location, location. You will want land that is easy to get to. The location you choose depends on how you plan to use or improve the land. If you’re looking to build a residential property, find land with easy access to public transport and commercial areas. If you’re looking to build a farm or ranch but live somewhere else, find a property that you can easily visit any time. You should also consider resale value in case you decide to sell it in the future.
    • Land boundaries. Knowing the land’s exact boundaries will tell you until where you can build so you don’t overstep your bounds. This also helps in avoiding potential issues and costly disputes with your neighbors. For this, hire a professional land surveyor who is familiar with the regulations in the area you’re interested in.
    • Obtaining a title report. Once you’ve found a potential property, confirm who the rightful owner is by acquiring a title report. This report contains the ownership rights, the recorded liens, and other components that can affect the title to the property.
    • Knowing your mineral and water rights. In Texas, mineral rights usually belong to whoever owns the surface estate, and it may or may not be transferred through a sale. If you agree, the seller may opt to keep the mineral rights to a property even as ownership of the property is transferred to you. For water, rights to groundwater usually belong to the landowner, but the rights to surface water remains with the state.
  4. Know the zoning laws

    Zoning laws state what can and can’t be built in a particular area. It’s good to know these as an investor because they determine how you’ll approach your investment. They differ from one place to the next, but Texas municipalities usually regulate the following:

    • Building height, size, and number of stories
    • Percentage of occupiable space in a lot
    • Size of courts, yards, and open spaces
    • Population
    • Location of buildings
    • Pumping and extracting of groundwater

    Zoning laws also determine the types of properties in the area. These include:

    • Residential – single-family homes, apartments, condos, duplexes, etc.
    • Commercial – office buildings, shopping centers, hotels, etc.
    • Agricultural – farming land, ranching communities, etc.
    • Industrial – manufacturing plants, storage facilities, etc.
  5. Appraise the land

    Before making an offer, have a land appraiser determine how much the land is worth. As a professional, their assessment can help you make an objective offer and take on negotiations more smoothly.

    To find a professional land appraiser, ask your real estate agent for recommendations or past appraisers they’ve worked with. Always choose an appraiser based on the quality of service they offer. Read online reviews and talk to past clients about their experience with the appraiser.

  6. Make a compelling offer

    Once you’ve found the property that you want to purchase, it’s time to make an offer. With your real estate agent, come up with a fair price based on comparable properties sold in the area. Your agent can also help you deal with tough negotiations if the need arises.