Why Invest in Raw Land Using Houston Hard Money Loans

open field raw land purchased with Houston hard money loans

For real estate investors with an eye for potential, Houston presents a promising opportunity. With its bustling economy, the city’s housing market is booming; however, because of this growth, many people are getting priced out of the traditional forms of property investment such as multi family homes or fixer-upper houses.

A smart alternative for those looking to capitalize on real estate opportunities is raw land investing in the Houston area via hard money loans. There are numerous advantages to purchasing raw land with hard money loans. Contact our team today to find out how you can access a hard money loan quickly and take advantage of land investment opportunities.

Raw Land – Lower Price, Higher Development Flexibility

For those looking to invest in real estate, buying raw land can be a brilliant move. With its potential for future development, raw land offers a unique opportunity to shape the property into your vision. However, it’s important to keep in mind that the process of buying raw land in Texas differs significantly from purchasing development-ready land.

The process of buying raw land in Texas differs from purchasing development-ready land primarily due to the considerations around potential land use, zoning restrictions, and future development plans. Investors must conduct extensive research and due diligence to determine whether the land can be utilized in the way they intend. Unlike development-ready land, which is typically primed and approved for construction, raw land may require additional steps such as obtaining permits, clearing land, or installing infrastructure, which can add to the complexity and timeline of utilization.

By taking the time to do your research, you can unlock the full potential of your raw land investment.

You Can Find Better Under Market/Off Market Deals for Raw Land

open field raw land purchased with Houston hard money loans
With hard money loans in Houston, you can quickly take advantage of promising raw land investments.

Investing in raw land can provide excellent opportunities for investors to acquire under-market or off-market deals with immediate added-value gains. Raw land is often overlooked by buyers as it requires considerably more effort than already developed properties. However, with careful research and due diligence, investors can find hidden gems in the raw land market. These deals can offer significant cost savings and potential profits, particularly with the added value gains from rezoning or development. By exploring the raw land market, savvy investors can uncover opportunities that others may have missed, resulting in lucrative returns on their investment.

Tax Exemption Opportunities for Raw Land

Investing in raw land in Texas can be a smart move for those looking to make a profitable investment. One unique advantage that raw land in Texas can have over other states is agricultural or other exemptions.

Agricultural tax exemptions provide substantial property tax reductions for landowners who utilize their property for agricultural purposes. To qualify, the land must have been used for agriculture for at least five of the past seven years and the owner must actively apply for the exemption. This provision offers a significant financial advantage, allowing investors to potentially save thousands of dollars on their annual tax bill while their property appreciates in value.

However, it’s also important to note that buyers and developers should factor in rollback taxes when considering this type of investment. These are essentially a form of retroactive property tax that the state can impose if the use of the property changes from agricultural to non-agricultural use.

For instance, if a property has benefitted from agricultural exemptions in the past, but the owner decides to develop the property for residential or commercial use, the county tax assessor can “roll back” the taxes for up to five previous years. The rollback tax is the difference between the taxes paid under the agricultural valuation and the taxes that would have been paid had the property been taxed on its market value.

These taxes can substantially increase the cost of property development and are oftentimes overlooked by new buyers. Therefore, when considering buying raw land with an agricultural exemption, it’s important to factor in the potential liability for rollback taxes into your financial projections and planning.

Hard Money Loans in Houston for Your Real Estate Investments

Underpriced raw land opportunities can be a financially advantageous investment for real estate investors. With hard money loans, you can have the funds at your disposal quickly, so you don’t miss out on any potential opportunities. Partner with Texas Funding and our team of local Houston lenders today and start your next rewarding venture.