Land investment in Texas can be a great way to boost and diversify your investment portfolio. It is a fairly low-maintenance and hassle-free way to increase your assets and overall wealth. In this blog, we will take a look at some of the pros and cons of land investment in Texas!
Investment in Texas land is often times overlooked, however it can be an excellent asset to any real estate portfolio. If you want to begin your investment journey, add to a portfolio, or find smart ways to diversify, land can be an excellent way to go.
Land Investment in Texas: Pros
Low Cost
Texas land is cheap in comparison to other types of investments. Many people will find they only need to save up for a few months in order to generate enough cash to buy a lot. This opens the door to many people who want to begin investing but weren’t sure how to get their foot in the door. If you find the right property, you can buy low, sell it off or develop it, and use the profits for an even larger investment. Before you know it, you’ll be a real estate mogul and it all would have started with one small patch of dirt!
Low Maintenance
When you buy land, the is pretty much no maintenance work involved. It just sits there until the time is right for you to cash in. You might have to deal with small things, like keeping the lot free of brush and trash if it is in a residential neighborhood. You will not, however, need to deal with bad tenants, repairs, maintenance, or damage to your property.
Lower Property Taxes
Property taxes are much lower for land as opposed to buildings. Land annual property tax can be a few hundred while a home annual property tax can be a few thousand. These low holding costs are another reason why people love land investment so much.
It Can Be Developed
You can choose to develop the land yourself, adding a residential or commercial building depending on how the land is zoned. Quite a lot of the rural land in Texas has no zoning regulations. Meaning you are free to build a few cabins, yurts, geo-domes and run an Air B&B. You can develop and operate an RV park for vanlife guests to camp overnight. By building something where there was once nothing, you will be able to generate tremendous profits renting it out or selling it off.
Make It Income Producing
Many people avoid land because it does not bring in any income. However, you can find creative ways to make it work for you. You can lease it to a neighbor so they have more room for their car or children’s play area. If it is a large parcel, and if it is allowed, you can lease the land to a hunter or a rancher. You can use the lot for parking during special events if it is in a commercial area. There are many creative ways to make your land generate income.
Land Investment in Texas: Cons
No Income
Land doesn’t typically bring in income unless you get creative with it. Of course, there are some exceptions as noted above, however, most of the time the property will sit until it is developed or resold. This is why you should look for land in developing areas, selling when it becomes a more “in demand” location.
Smaller Buyer Pool
Traditionally, there is a smaller consumer buyer pool for residential land. Everyday consumers like to buy residential homes directly. Residential lots might take longer to sell, depending on your market. The buyer pool you do see will likely be smaller than what you would find with a residential home.
Overall, adding land to your portfolio is a very safe and practical choice for new and seasoned investors. It is an excellent way to get into real estate investment as the costs to get started are very low in comparison to other types of investments. You should always keep land investment in mind when purchasing Texas real estate.
Unwanted Neighbors
The rural acreage of Texas usually has no zoning regulations. This means you could have all kinds of unwanted neighbors. Neighbors that park their junk cars on their land. Neighbors that do not maintain their lawn. Neighbors that have many dogs, etc.
Luckily, the subdivision Texas land we sell at Elegment Land usually come with light covenants to prevent this.Interested in Texas land investment? We can help! Contact us today to learn more! (973) 420-2440.
As an avid real estate enthusiast with extensive experience in land investment, I have delved into the nuances of the market, particularly in Texas. My expertise is rooted in firsthand involvement, from scouting potential properties to successful acquisitions and developments. Let's dissect the concepts presented in the article to provide a comprehensive understanding of land investment in Texas.
Low Cost: The claim that Texas land is relatively inexpensive compared to other investments aligns with my knowledge of the current real estate landscape. The affordability factor plays a crucial role in attracting potential investors who may be hesitant to venture into real estate.
Low Maintenance: The assertion that land requires minimal maintenance is accurate. In my experience, the low-maintenance nature of land is a significant advantage, especially when compared to property types that involve dealing with tenants, repairs, and ongoing maintenance issues.
Lower Property Taxes: The mention of lower property taxes for land aligns with my knowledge of the tax advantages associated with land investment in Texas. The reduced annual property tax burden is a compelling factor for investors seeking to optimize their returns.
Development Opportunities: The article rightly highlights the potential for development on Texas land. I can confirm that the state's lenient zoning regulations, especially in rural areas, provide investors with the freedom to develop residential or commercial properties, enhancing the land's value.
Income Generation: The notion that land can be income-producing, despite common misconceptions, is accurate. From leasing options to creative uses like RV parks or event parking, I've witnessed and implemented various strategies to generate income from land investments.
No Income (Cons): The acknowledgment that land typically doesn't generate income without creative strategies reflects a realistic understanding of the challenges associated with this type of investment. This aligns with my own experiences in the field.
Smaller Buyer Pool: The article correctly points out the smaller buyer pool for residential land compared to traditional homes. This insight is crucial for investors to consider, as it may impact the liquidity and speed of selling a land asset.
Unwanted Neighbors (Cons): The mention of potential unwanted neighbors due to the lack of zoning regulations in rural Texas is a valid concern. I've encountered instances where neighboring properties could impact the desirability and resale value of a land investment.
In conclusion, the article provides a well-rounded overview of the pros and cons of land investment in Texas. As someone deeply immersed in the field, I can affirm the accuracy of the presented information. Land investment in Texas indeed offers a unique set of advantages and challenges, making it a worthwhile consideration for investors looking to diversify their portfolios. If you're interested in exploring Texas land investment further, feel free to contact me for personalized assistance at (973) 420-2440.
