If you want to buy or own a piece of land in Texas, or even just wondering what it is worth, you need to know how to value it properly. In this blog post, you’ll read our best advice about how to do that…
What You Need To Know First About Land Value in Texas
The very first thing you need to know is: it’s an art and a science. There are many factors that go into the valuation of land and there is never one single number that you can definitively say, “THIS is what my land is worth.” So we’ll give you some of the factors below but be aware that when it comes to how to determine the land value in Texas, you’re really looking at an approximate range.
Land Value in Texas: the Market Price Method
Economists will tell you that the best way to know the value of your land is to sell it. The price that someone is willing to pay is the value of your land. Of course, you might not be ready to sell. Perhaps you’re just trying to see how much you can get for it. But certainly the most definitive answer you can get is how much someone is willing to buy your land for.
Real property sites such as Zillow, RedFin, Realtor.com, and HAR.com (this one is only for Houston Metro area) provide list prices for vacant land. They also list other property types such as houses, apartments, townhouses. You will want to make the first filter selection by property type – to only include Lots/Land.
Typically Texas land can be grouped by acreage range. In Elegment Land, our typical groupings are:
- Less than 1 acre
- 1 – 5 acres
- 5 – 20 acres
- 20+ acres
For example, if you land is 7 acres, then you will want to set the land acreage filter to between 5 acres and 20 acres.
Now take out your Microsoft Excel or Apple Numbers :-), start putting the list prices and acreages in spread sheet. Add an additional column “$/Acre” by taking the list price divide by acreage to get the unit price per acre. Finally, sort the spreadsheet by $/Acre from largest to smallest. You will get something like this.
We typically remove the bottom 25% and top 25% to take out the outliers. Now that we can see the middle 50% list price is in the range of $25K/acre to $80K/acre, while the average is $43K/acre and the median is $35K. This provides a good estimate for this county’s land value in Texas.
Online Prices Shouldn’t Be the Only Way To Determine Land Value in Texas
However, we also want to advice land sellers and land buyers to use these numbers with caution! The true value of the land can derived from a number of other factors. These numbers can be wrong by as much as 50% in some areas. For example:
- Proximity of the land to a major or small city
- Utility access of the land
- Paved road vs. dirt road
- The terrain of the land
- The soil type of the land
- The tree value of the land
- The mineral rights of the land
It is important to take these factors into consideration in your determination of the land value in Texas.
Agent Market Valuations Are A Simple Way To Determine Land Value in Texas
List price is a good estimate to land value in Texas. But it does not represent the actual sold price. The most accurate method is by checking Sold Price of similar transactions. However, Texas is a non-disclosure state. Meaning the sales price of real property is not recorded and made available through the public record.
You can read more about Texas non-disclosure state information here: LINK.
Many real estate agents in Texas offer free market valuations to land owners and potential land buyers using sold prices. So you may consider calling up an agent and asking for a market valuation. The agent will then look at data from similar properties that have sold recently in the area and they’ll use that as a way to help you determine the land value in Texas. Again, it’s not a perfect number (since factors change) but it’s a good estimate.
Here’s The Most Important Factor to Determine Land Value in Texas
The best judge of the value, though, is YOU. Three people looking at the same piece of land will get very different valuations – if one is a farmer wondering how hard it will be to clear the land and grow a crop, and if another is an owner who wants to build a retirement home in the wooded area, and if a third is a property developer looking to divide up the land and develop a subdivision. Each one will value the land according to their needs. You will probably need to consider some factors in the non-scientific Art form:
- Proximity to family and friends
- What you plan to do with the land
- Proximity to veteran hospitals
- Proximity to great hunt land
- Proximity to great fishing spots
- Proximity to pet clinics
So what do YOU see yourself using the land for? And remember: value is not always a financial number but also includes the time, effort, and potential enjoyment you can get from the land.