THINGS TO CONSIDER BEFORE BUYING RURAL LAND NEAR HOUSTON

Daily life just doesn’t seem to be as simple as before. We are distracted by increasing traffic, pace of life in general, Covid is a disrupter, social unrest is a constant topic in the news and the list goes on. It seems like there are an awfully lot of people around and maybe a little more elbow room would be nice.

If you are just beginning to think about moving to the country (and I hope you are) there are a lot of things to consider before beginning the search process. This might be a good time to find a rural land broker you are comfortable with to discuss ideas. My advice would be to visit with a rural land broker who has the Accredited Land Consultant (ALC) designation. Most of them enjoy visiting with folks about rural property even if they aren’t ready to buy. I know I do.

TAKING STEPS TO OWNING YOUR PIECE OF TEXAS

• Reasons for moving to the country.
• What type of property are you considering?
• The community you would most enjoy
• Financing will set the stage
• Access
• Utilities
• Improvements
• Land use restrictions
• Exemptions
• Vendors and Resources

REASONS FOR MOVING TO THE COUNTRY

• The pace is slower and not just because of the traffic. There are fewer people in the store, in school and at church.
• There is a good chance that there is a possibility of a commute to work in the city is not a lot farther time wise than you are driving now.
• You can work online at home in the country as well as in the city.
• Medical facilities, sports and cultural venues aren’t out of reach.
• Living on 5 or 10 or more acres gives you a little more elbow room than an apartment complex or residential subdivision.
• There are 4H and FFA programs for your children.
• Potential for increase in value.

WHAT TYPE OF PROPERTY ARE YOU CONSIDERING?

Living in the country is a pretty general term. Obviously it can be full time or part time. Property types can range from a historic home in Fayetteville to a weekend retreat on some acreage in Grimes County or a full scale ranching operation in Colorado County. The type of property you are interested in will impact several other factors.

• Single Family Home in a quaint community such as New Ulm, Round Top, Anderson , Moulton or Fayetteville to name a few is a fairly inexpensive way to test the water and see how country living appeals to you. You can rent it out on AirBnB If you are using it part time. One of the pluses of this type property is a good resale market.

• Weekend retreat on a small acreage with room for a few horses or cattle. Ideally the improvements would be a modest home, barn, sheds, fencing, pens and a pond. Great getaway for the family and gives you an excuse to have a pickup. Hunting is a possibility. This type place will give you the potential of building a permanent residence for later.

• Permanent home for your family is becoming a popular choice. Similar to weekend retreat above. Location considerations would include school district and distance from a town with basic shopping and medical facilities. Consider 20 acres and up for 4H and FFA projects. School bus routes might be important. Community water and natural gas are also considerations. Paved road access could be a plus.

• Recreational properties to include hunting might require a little more land than above categories. 50 acres and up would be good. The family will have fun with ATV four wheelers on the weekends. You may have to build a pond for fishing. This type of property wouldn’t necessarily require a home and could work in a more remote location. All weather roads (no pavement but good base) work just fine. Leasing the land to a rancher could result in some income and also provide basis for an agriculture or wildlife exemption. As time goes by the potential for subdividing might present itself.

• Upper income individuals are buying and developing impressive country estates often with equine and show cattle facilities. Vineyards are becoming popular.

• There are a lot of other property types including a variation that fits you.

WHICH COMMUNITY WOULD YOU ENJOY THE MOST?

As you head out of Houston, drive past the billboards inviting you to buy a home in subdivisions with names that suggest they somehow offer country living. They really don’t you know. Keep on driving to the real deal. Retreat from Houston.

The primary direction of Houston’s growth is west and north. IH 45 (north to Dallas), US 290 (northwest to Austin) and IH 10 (west to San Antonio) are the main arteries serving the Northwest side of Houston. The counties on either side of these freeways for a distance of up to 100 miles from downtown Houston (two hour drive) represent the prime potential for rural property opportunities and country living.

Harris and adjacent counties make up the Houston Metro Area and virtually all of the adjacent counties are urban. The next layer of counties represent the most potential for a rural lifestyle. These counties include; Austin (Bellville), Brazos (Bryan), Burleson (Caldwell), Colorado (Columbus), Fayette (La Grange), Grimes (Anderson), Lavaca (Hallettsville), Lee (Giddings), Madison (Madisonville), Walker (Huntsville), Waller (Hempstead) and Washington (Brenham). Brazos, Waller and Walker are the closest to Houston and the least rural while the rest are mostly rural.

Within each county the most important consideration is probably the school district. This is true even if you don’t have school children because of value considerations. You might want to check on local police presence and availability of ambulance service. Drive the area with an eye on property uses. Neighboring uses (and neighbors) vary. For example, lit is good to be surrounded by large acreage tracts.

FINANCING WILL SET THE STAGE

THE MOST IMPORTANT SINGLE FACTOR TO CONSIDER WHEN THINKING ABOUT BUYING RURAL PROPERTY IS FINANCING. CHOOSING A LENDER AND GETTING PRE APPROVED FOR A LOAN SHOULD BE THE FIRST STEP ON YOUR JOURNEY TO HAVING A PLACE IN THE COUNTRY. KNOWING HOW MUCH YOU CAN BORROW WILL DEFINE THE REST OF THE PROCESS.

Most buyers will obtain a loan to buy rural property. The process is somewhat similar to financing a home but with some major differences. Rural property is generally financed by a farm credit institution or a local bank. Sources of residential loans do not usually finance land. Typically a 20% cash downpayment will be required. A good first step is to locate a lender and find out what information they need to issue a pre approval letter. Ask your land broker about lenders active in the area.

ACCESS

Do you want great accessibility not too far from an Interstate Freeway or is your idea of a great location something a little more remote. Is frontage on a paved road a requirement or is being on an all weather road not a problem. Occasionally, a well priced property can be found but it only has access via a lane but no frontage. If access via a lane is acceptable to you, consider whether it is deeded either by fee or easement. Insist on a written document. A hand shake deal allowing access across another property is not sufficient.

UTILITIES

When you live in a subdivision your utilities are, well, right there. Utilities in the country don’t come in such a neat package. When making a decision about locating in the country you will need to consider the availability of utilities. Do you require community water or will a water well work for you. The cost of a new water well is significant and on some tracts of land drilling may not be physically possible. Will you settle for a propane tank or do you insist on a natural gas line. Check out electrical service. The cost of extending an electrical line to a property may well be prohibitive. Understand that you will have to have a septic system for a house. In many rural areas there is no high speed internet.

IMPROVEMENTS

This is a good time to give some thought to the type of improvements which will suit your dreams. Maybe you want to start with a blank canvas and add the site improvements and buildings you want over time. On the other hand, you might like a total package with everything already in place right now. Either end of the spectrum or anything in between is available within two hours or less from Houston.

Site improvements include such items as roads, trails, ponds, brush and tree removal, fences and gates. Buildings include items such as barns, sheds, pens and residences. Your considerations will be related to how much you want to do or have done yourself in addition to what is already on a particular property. During this stage it is important to keep in mind that improvements, while providing enjoyment and/or utility to you and your family, may not necessarily increase market value in direct relation to cost. An extremely large barn on 10 acres could well be an over improvement while a pond may increase the value of the land more than you spend on having it built.

LAND USE RESTRICTIONS

Finally, give some thought to use restrictions impacting land. Before making improvements, check out legal and physical restraints on the land. A few examples would be; easements, zoning, floodplains, wetlands, driveways, permits and rules related to subdividing. Each county will be different.

EXEMPTIONS

Ownership of rural property can offer significant ad valorem tax relief.

• An exemption doesn’t result in no ad valorem taxes being paid. It means that the land under exemption (based on its use) is appraised in a different way which generally results in a much lower valuation. The land is exempt, not the buildings.

• In Texas property assessments are generally based on market value. If the land has an exemption, an agriculture productivity appraisal (1-d-1) is used. Basically this valuation reflects the capitalized rental value from agricultural or hunting.

• In order to obtain an exemption the land must have been used for agriculture five of the past seven years. The use must have been to the degree of intensity generally accepted in the area.

• Wildlife exemptions can include protection of federally listed endangered species and also certain conservation or restitution projects under certain state and federal statutes.

• A roll back tax occurs when the land owner changes the use from agriculture or wildlife to a non agricultural use. An example would be from farming to a residential subdivision. The penalty is based on the difference between the exemption value and market value for the past five years plus interest. The land owner initiating the change is responsible for the roll back tax.

Generally exemption programs are administered by the County Appraisal District.

VENDORS AND RESOURCES

There are a lot of factors to consider and I certainly don’t mean to frighten you away. Actually, it will be fun exploring the possibilities and opportunities of having a place in the country. I have enjoyed doing the research for this blog post. There are plenty of resources.

First of all there is that rural land broker I mentioned before. They will give you list of folks you can check with while you are doing your research. A sample will include; surveyors, dirt contractors, fence builders, water well drillers, inspectors insurance agents, feed and hardware stores, building contractors and so on. One of the most important recommendations will be a great local diner.

SUMMARY

This blog post is about organizing your thoughts. Rural property within 100 miles of Houston could be the right place and this is the right time. There is a lot to think about. But, as the old saying goes, if not now, when? Fortunately, there are plenty of resources and people to rely on. My advice would be to choose a rural land broker, preferably one with an ALC designation. A good land broker will be happy to visit with even if you are not ready to buy. They can advise you as to financing, property types and the community you would most enjoy living in. These are the most important considerations to begin with.

CHECK IN WITH US

Allen Realty Advisors represents buyers and sellers of fine quality rural land near Houston. We specialize in weekend retreats, country estates, farms and ranches, recreational property and investment land. Our market area is generally within 100 miles (two hours) of Houston.