Land buyers in Texas have discovered that vacant property investments add cash flow to monthly income while increasing wealth and passive earnings for retirement. Additionally, a diverse portfolio allows land buyers a degree of safety in fluctuating economic sectors.
Real estate is a fantastic way to expand your investment portfolio, and Texas land is an untapped market. Typically, investors can break into land ownership with lower costs, no red tape, and less time spent qualifying for financing, as there is usually no mortgage.
Buyers investing in vacant land can expect to see:
- Increased cash flow
- Long-term passive income
- Large profit margins
If you want to see significant returns on your local investment, however, the appropriate steps must be in place to earn rewarding profits. Like the pieces of a puzzle, conducting proper research is imperative when seeking to foster substantial gains.
Successful developers understand the issues that investors should plan for in advance, and they’ve shared the 4 tips all land buyers in Texas should keep in mind if they plan on buying land regionally.
Make the Most of Your Investment with These Tips for Land Buyers in Texas
1. Pick the Right Location
For most land buyers in Texas, prime locations are those in proximity to developed areas that provide a higher quality of life for its residents. Less available real estate means higher demand, resulting in increased value and growth stability over long-term appreciation. Texas buyers should be intimately familiar with their real estate market if they’re hoping to find the best location for their investment.
A good location, including the proper zoning for your intended purposes, is the most critical factor in returns when buying vacant land. Because real estate tends to hold value over time, the location of a lot can influence the property’s long-term value and profitability.
First, narrow down the area of Texas where you would like to buy land. Once you’ve identified your budget and the area in which you can afford to invest, select the property that best suits your needs. For example, the corner lot of a newly developed neighborhood is instantly desirable while attracting great value. If you plan on leasing the vacant land to seasonal businesses, such as Christmas tree or firework vendors, then busier road frontage should be your priority.
Click here to read more about the state’s most popular locations for land buyers in Texas!
2. Understand the Estimated ROI
Smart investors take advantage of this under-looked investment opportunity by purchasing vacant land at lower demand (and cost) than ready rental housing, leading to handsome returns without any management or routine maintenance.
Before you invest in Texas land, it is essential that you fully understand the estimated returns for your desired property. A high ROI (Return On Investment) should indicate to investors that the selected property is a reliable addition to their investment portfolio.
When it comes to land investments, the return is generated by utilizing the vacant land, selling the land, or developing the land for subdivision. Whether you plan to build a single-family home or develop on a massive scale, Texas investors should be aware of proper planning procedures and trusted practices to see substantial profits.
Supply and demand are some of the ultimate factors that can affect land’s profitability. The less there is of a particular type of real estate, the higher the value. Investors must perform due diligence and careful analysis of their property’s value and demand before buying vacant land in Texas. Because of its limited availability and increased demand, lots near the inner city will see higher prices and higher returns. Alternatively, rural land investments on the outskirts of town make great long-term investments as their value increases with urban expansion and population growth.
3. Account for Property Expenses
Investing in Texas land can easily turn into a financial nightmare if you don’t accurately account for all development costs. Due diligence should reveal any hidden issues with the potential to turn into roadblocks before you’ve even approached the closing table on your first deal.
As a land buyer in Texas, it is crucial that you understand the cost to build on your land. Calculate expenses such as building costs, ground materials, landscaping, and any additional services the builder does not include, and be sure to obtain a list of the available services your builder provides.
Investors should also consider the post-construction charges to market. Since construction can be delayed for a bounty of reasons, plan to hold and maintain the property until it sells. And don’t forget the added expenses that come along with selling, like closing costs for new construction.
Be wary of jumping into your investment feet first without looking—always conduct proper analysis and legal research into title and environmental laws to avoid common pitfalls among inexperienced investors.
Read this article for more tips on investing in vacant San Antonio land and other raw land.
4. Know Local Zoning Laws
Zoning, the division of properties into predetermined designations and uses, exists to enhance the lifestyle and efficiency of Texas residents and business owners. There are several zoning regulations that can affect a property, such as aesthetic and environmental factors.
Investors should research local zoning regulations in Texas to ensure the property’s designations fit their needs. You’ll also need to be aware of any restrictions pertaining to the property in order to guarantee any planned use of the land.
Let’s say that you’ve found the perfect location. If the zoning doesn’t quite fit your vision, land buyers in Texas can change the zoning, or be granted a variance or exemption. Your local zoning department should be the first line of contact, as they can assist with kick-starting the zoning process. Your odds of a successful zone change increase if the current zoning has neither progressed with nor suits the area any longer.
Although a change in zoning will likely add property value, buyers should seek legal assistance to avoid missteps.
How We Help Land Buyers
At Harmony Land Holdings LLC, we have every type of land available in our inventory. Investing in Texas land is easy with the help of Harmony Land Holdings LLC—whether you’re a first-time investor or building your portfolio beyond what you can manage independently.
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