Considerations when buying undeveloped land

[Bobk]

How many have bought undeveloped land and then wish that they would have either researched or took something into consideration before purchasing? If so what was it?

 

[zembonez]

If you are planning on building on undeveloped land, it pays to make sure there are utilities available (and not 5 miles away). A buddy of mine bought 12 acres of beautiful land to build on and it cost him about 25,000 bucks to get electricity to his site because all of the other land around it was also undeveloped. Might also want to know how deep a well needs to be and how expensive it is to drill one in the area.

 

[Acera]

Check in to agricultural exemptions for tax purposes. If you are planning on putting a house on it, consider re-plotting it so that the house is sitting on a small piece of land, and all the land around it is on a different property title. In essence you will have two properties, but will save you a lot on taxes, due to different rates. If you can get the mineral rights, do so. A lot of land sold today in Texas is just the surface rights, many sellers maintain the mineral rights due to the amount of oil/gas exploration going on.

Contact a land attorney if you are considering any sizable purchase.

 

[TXARGUY]

I agree with all of the advice above. Another thing to consider that has not been mentioned is to check the condition of the fences. On a large piece of property you can easily sink another 100k on fencing.

 

[Younggun]

Find land that already has an ag exemption. It's a lot easier to keep it that way than to get the ag exemption on something that didn't have it previously.

You can then homestead 1 acre to put your house on.



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[TXARGUY]

That Ag exemption being in place is super important. It will save you gobs of money in property taxes. It takes six years of provable production to get an Ag exemption on a piece that does not already have one. What you'd be looking for would be the 'open spaces' exemption (google it), unless you are looking at full time farming but I figure if you were a farmer you'd already know the answers to your question.

Edit: Also consider equipment you'll need; tractor, brush hog, post driver, fencing tools etc...

 

[Younggun]

I know some who have gotten the tax break from the start but if they didn't show what was needed after 5 years they would owe all the back taxes for the preceding years. That would suck.


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[deemus]

It depends on your intended use of the undeveloped land. If you just plan to have a farm / ranch on it (under 400 acres ain't a ranch), then you want to listen to all the above. But in reality, if you are buying large piece of land, its likey already in ag exempt status. What is close to it? Will hunting or shooting be a problem, if you plan to do that? What type berms are naturally there if you plan to shoot? Cost of creating a berm? Cost of putting in septic is valid, especially in a rocky area. Water available? System? or do you have to drill? Water rights on the land attached, if that is applicable in your area?


If you plan to develop it for commercial or residential, then that's a whole other discussion. Road infrastructure to get there? Sewer and other utility availability? Proximity to an urban area for shopping, and lots more on that one.

What do you plan to do with it?

 

[London]

I highly recommend reading this book:

Starting A New Life In Rural America: 21 Things You Need to Know Before You Make Your Move: Ragnar Benson: 9781581604931: Amazon.com: Books

It is not Texas specific but it will definitely help you out.

 

[grasshopperglock]

Try and see the land after a heavy rain storm. You'd be surprised on "land deals" how much water stands

 

[London]

http://recenter.tamu.edu/pdf/1361.pdf

 

[TXARGUY]

If you can get over to College Station for one of these seminars you'll be in even better shape:

Texas A&M University Ag Program Forages

I went to one a couple of years ago and left with my mind blown at the amount of knowledge I had just picked up.

(under 400 acres ain't a ranch)

Yeah, I pretty much reject everything about this statement. I challenge anyone to come up and see my operation and tell me that it's not a ranch.

 

[Mr. Bojangles]

If you can get the mineral rights, do so. A lot of land sold today in Texas is just the surface rights, many sellers maintain the mineral rights due to the amount of oil/gas exploration going on.

It's my understanding that getting mineral rights is almost impossible these days. This is something that should be strongly considered when buying land. The owner of the mineral rights can literally tear your land up to get at whatever is underneath it, and all they have to do is supposedly put it back the way it was. Good luck with that ever happening. I've got a buddy that owns a few hundred acres outside of Fairfield and they've already been told their land will eventually be dug up for coal.

 

[macshooter]

I highly recommend reading this book:

Starting A New Life In Rural America: 21 Things You Need to Know Before You Make Your Move: Ragnar Benson: 9781581604931: Amazon.com: Books

It is not Texas specific but it will definitely help you out.

I enjoyed that book.

 

[TheDan]

What you'd be looking for would be the 'open spaces' exemption (google it), unless you are looking at full time farming

This... Unless you are planning on farming or ranching as a business, you don't want the ag exemption. If you end up with land that is ag exempt and you can't prove agricultural production then you'll end up loosing it and paying rollback taxes from the last 5 years. Open spaces is more lenient.


What I've found in my limited experience is undeveloped land is a pain in the ass. Initial investment will be more, but if you can find something with structures and utilities already in place then you'll have an easier time getting a loan, your interest rates will be lower, and you'll save money in the long run because doing all that stuff costs more than you'd think.

Yeah, I pretty much reject everything about this statement. I challenge anyone to come up and see my operation and tell me that it's not a ranch.

Raising miniature donkeys doesn't count

 

[Younggun]

This... Unless you are planning on farming or ranching as a business, you don't want the ag exemption. If you end up with land that is ag exempt and you can't prove agricultural production then you'll end up loosing it and paying rollback taxes from the last 5 years. Open spaces is more lenient.



Raising miniature donkeys doesn't count

AGs not hard to keep if it's already there. Get a couple cows or a goat, hell pecan trees can qualify(but beef tastes better). HEB ain't got shit on a home grown steer, you'll learn to hate store bought meat.




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[TXARGUY]

AGs not hard to keep if it's already there. Get a couple cows or a goat, hell pecan trees can qualify(but beef tastes better). HEB ain't got shit on a home grown steer, you'll learn to hate store bought meat.




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Yep. Between my cattle and hunting I have not bought a piece of meat from a store in probably 10 years.

 

[Texastransplant]

I got lucky being from out of state and buying. I reserched it before and made sure that it was more then 10 acres, far from a town so it woudn't be in a city limits and limit my use. I wanted a place to shoot too and that I have. I wanted a place away from the large cities with there "emissions sniffers" . I wanted to be able to on occasion burn things which I can. I wanted a place that is not easily visiable and not on the main road, has plenty of trees and great fencing. I guess the only thing that didn't happen was that my tank...is dry most of the time. It was full when we made the offer and empty when we moved in. I was told to large 40 lb catfish were in it and must of disturbed the bottom. I found their bones and maybe this was so but seldom had enough rain to fill it and it drains out. Happy after moving from the 3rd worst city for crime to central Texas.

 

[TXARGUY]

I got lucky being from out of state and buying. I reserched it before and made sure that it was more then 10 acres, far from a town so it woudn't be in a city limits and limit my use. I wanted a place to shoot too and that I have. I wanted a place away from the large cities with there "emissions sniffers" . I wanted to be able to on occasion burn things which I can. I wanted a place that is not easily visiable and not on the main road, has plenty of trees and great fencing. I guess the only thing that didn't happen was that my tank...is dry most of the time. It was full when we made the offer and empty when we moved in. I was told to large 40 lb catfish were in it and must of disturbed the bottom. I found their bones and maybe this was so but seldom had enough rain to fill it and it drains out. Happy after moving from the 3rd worst city for crime to central Texas.

I grew up in the country and got back as soon as I could afford to. I have to say that land ownership is one of the coolest things a man can experience. Now I'm addicted and keep buying more. I love being able to drive in, close the gate and let the rest of the world f' off. Shoot when I want and what I want with my own range rules (safety first of course), hunt, fish, run cattle, grow hay, or what I love to do the most just walk the land and explore which is very relaxing (except for the times when I find evidence of tresspassing which pisses me off to no end).

I'm a landman so I only buy land with minerals. It's out there, you just have do do a little research. If 100% of the minerals have been separated from the surface I will usually pass unless it's a piece that my wife loves so much I get over-ridden. If 75% or less has been removed I'll go with it and start searching out the other owners so I can buy the minerals back from them. I currently own 100% of the minerals under all of my land.