Texas has always been a big draw for real estate folks, and frankly, it’s not hard to see why. With a booming population, a booming economy and endless open sky, buying a piece of ground in the Lone Star State would seem like a classic, safe bet. Whether you’re looking for a multi-acre ranch, a quiet place to hunt, or a piece of dirt right on the edge of town, Texas has land few other places can match.
With that said, buying raw land is not the same as buying a standard home or investment property. Empty dirt has its own quirks, headaches hidden in plain sight, and surprise costs. But before you jump in and spend your money, here are the real-world things you need to know first.
1. Place and Actual Course of Development
“Everyone says location, location, location, but with raw acreage you’ve got to look a little further out.” It’s not just what’s next door; it’s where roads and housing developments are going for the next five to ten years.
Texas continues to expand beyond its major centers. These include Dallas-Fort Worth, Houston, San Antonio and Austin. As cities grow outward, properties just outside these growing zones tend to appreciate much faster.
Keep these simple questions in mind when checking out a location:
- Distance to nearest main road? Easy highway access usually keeps land values up.
- Is the town actually growing? Look for signs such as new school builds or updated utility work or commercial construction in the area.
- Is it possible to get to the property at all? Do not assume legal access for all parcels. Always verify that there is a clear, dedicated road easement so you do not end up with landlocked land.
2. Surface rights and mineral rights
If you aren’t a native Texan, this one can throw you for a loop. In Texas, the dirt on top and the stuff deep underground are two entirely different properties.
In fact, if a previous owner retained the mineral rights, an energy or drilling company has the legal right to come right onto your property and drill for oil, gas or minerals under your property.
To keep things simple as you search:
- Have a title search done that specifically looks at the history of mineral ownership on that parcel.
- If the minerals are already separated, look into surface use waivers, which are good for protecting where you actually want to build.
- Check water and timber rights, especially if you are purchasing heavily wooded tracts or agricultural land.
3. Terrain and Water Access
Water is a big deal all over Texas, and access is wildly different depending on where you are. While East Texas generally gets a lot of rain, portions of West Texas are much drier and need more careful planning.
Wells, Ponds and Rivers
When it comes to groundwater, Texas follows what’s known as the “Rule of Capture,” which essentially allows owners to pump water from beneath their land. But local groundwater districts can still regulate well sizes and pumping limits.
Here are a few basic things to look out for:
- Well Depth: Without city water lines, ask around for typical well depths and local costs from neighbors or local drillers.
- Flood Risks: Streams and low-lying areas look great in the spring, but double-check flood maps so you don’t end up with land that’s impossible to build on or crazy expensive to insure.
- Soil Types: Rocky ground or sticky clay can rapidly ramp up the cost of clearing land, laying foundations or putting in driveways.
4. Taxes, Zoning and Ag Exemptions
Texas is pretty laid back when it comes to regulations but if you’re talking about land on the outskirts of a city it will be subject to local zoning laws and building codes.
Out in the county, taxes are usually your biggest ongoing expense. Enter an Agricultural (Ag) or Wildlife Exemption, which becomes your best friend.
An Ag exemption taxes land based on its agricultural use (raising livestock, producing hay, growing timber) and not its full market value. That small difference can save you thousands of dollars in property taxes each year. If you are looking through local listings, such as on Mossy Oak in Texas, it is typically better to focus on tracts that already have an active exemption, as it is significantly easier to keep one in place than to start fresh.
5. Bringing Utilities to the Property
Bare dirt looks deceptively cheap on paper. A low price per acre sounds great until you realize how much it takes to get basic utilities to the property line.
Be sure to get a handle on these basics early in the process:
- Power Lines: Know where the nearest utility pole is. Usually, companies charge by the foot to get power out to a new location.
- Septic Needs: If there is no city sewer, you will need a septic tank. An early simple soil test will tell you what kind of system you will need to install.
- Cell Signal and Internet: Make sure reception is good before closing if planning to build a house, work remotely or turn the spot into a vacation rental.
6. Develop a Genuine Exit Strategy
Before you make an offer, ask yourself what you actually intend to do with the land once it’s yours.
- Holding for long-term growth? Focus on areas right in the path of suburban sprawl.
- You thinking about breaking it up? If you want to break a larger piece into smaller lots, check with the county first to see what the rules are on road widths and lot minimums.
- Need income now? While you hold on to it, consider leasing the land for hunting, cattle grazing or farming.
Buying Texas dirt is still one of the best solid, satisfying moves you can make in real estate. But the best way is to do the boring homework first. If you take the time to investigate water access, utility costs and property lines, you’ll be in a much better position later on.
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