Ultimate Guide to Buying and Building on Land in Texas

At Austin Capital Mortgage, we specialize in land loans and construction financing, helping Texans turn raw land into their ideal property.

In this comprehensive guide, we’ll cover:

• Best places to buy land in Texas
• How to buy land and build a house in Texas
• Is buying land in Texas a good investment?
• Key financing tips for land purchases

Let’s dive in!

1. Best Places to Buy Land in Texas

Texas is a massive state with diverse landscapes, from Hill Country ranches to coastal properties.

Here are some of the best places to buy land in Texas based on affordability, growth potential, and lifestyle:

Hill Country (Fredericksburg, Boerne, Dripping Springs)

• Scenic views, wineries, and proximity to Austin/San Antonio
• High demand for vacation homes and retirement properties

Central Texas (Austin, Georgetown, Bastrop)

• Fast-growing areas with strong appreciation potential
• Ideal for residential and commercial development

East Texas (Tyler, Longview, Nacogdoches)

• Affordable timberland and recreational properties
• Great for hunting, fishing, and farming

West Texas (Marfa, Fort Davis, Big Bend)

• Remote, rugged landscapes with low prices
• Popular for off-grid living and eco-friendly builds

Gulf Coast (Rockport, Corpus Christi, Galveston)

• Waterfront and coastal properties for vacation homes
• Rising demand but higher insurance costs

Pro Tip: Research local zoning laws, utility access, and future development plans before purchasing.

2. How to Buy Land in Texas: Step-by-Step Process

Step 1: Determine Your Budget

Before searching for land, assess your finances:

• Down Payment: Land loans often require 20-50% down (vs. 3-20% for traditional homes).
• Loan Type: Options include raw land loans, unimproved land loans, and improved land loans—each with different requirements.
• Additional Costs: Survey fees, property taxes, permitting, and utility hookups.

💡 Financing Insight: Austin Capital Mortgage offers competitive land loan rates with flexible terms. Get a free pre-approval today!

Step 2: Find the Right Property

• Use land listing sites like LandWatch, Land and Farm, or local realtors.
• Consider access to water, electricity, and roads—undeveloped land may require costly improvements.

Step 3: Conduct Due Diligence

• Get a Land Survey – Confirms boundaries and easements.
• Check Zoning & Restrictions – Some areas limit building types (e.g., no mobile homes).
• Soil & Perc Tests – Essential for septic systems.
• Environmental Hazards – Flood zones, endangered species, or oil/gas leases.

Step 4: Secure Financing

• Traditional Land Loans (shorter terms, higher rates)
• USDA Loans (for rural areas)
• Home Construction Loans (if building immediately)

Expert Tip: Combining a land loan + construction loan into a single all-in-one loan can save money. Learn more about our construction-to-permanent loans.

Step 5: Close the Deal

• Work with a title company to ensure a clean transfer.
• Pay closing costs (typically 2-5% of the land price).

3. How to Buy Land and Build a House in Texas

Once you own the land, the next step is building a house. Here’s how:

Choose the Right Builder

• Look for Texas-licensed builders with experience in your area.
• Check reviews on the Texas Department of Licensing and Regulation (TDLR).

Secure a Construction Loan

• Covers building costs in phases (foundation, framing, finishing).
• Converts to a traditional mortgage after completion.

Obtain Permits

• Required for electrical, plumbing, and structural work.
• Fees vary by county (check local government websites).

Install Utilities

• Rural land? You may need a well, septic system, or solar power.
• Costs range from $10,000–$50,000+ depending on location.

Did You Know?
Some Texas counties offer tax incentives for eco-friendly builds like solar or rainwater collection systems.

4. Is Buying Land in Texas a Good Investment?

Pros:

• Appreciation Potential – Texas land values have risen 5-10% annually in high-growth areas.
• Low Property Taxes – Compared to states like California or New York.
• Versatility – Use for farming, hunting, rentals, or future development.

Cons:

• Illiquidity – Land sells slower than houses.
• Hidden Costs – Surveys, permits, and utility installations add up.
• Market Risks – Rural land may not appreciate as quickly.

Smart Investment Strategies:

• Buy near future infrastructure projects (new highways, schools).
• Consider seller financing if traditional loans are difficult.
• Lease the land for agriculture or hunting for passive income.

5. Final Tips for Buying Land in Texas

1. Work with Local Experts – Realtors, surveyors, and lenders familiar with Texas land.
2. Visit the Property – Check for accessibility, drainage, and neighboring land use.
3. Plan for the Long Term – Will this be a retirement home, rental, or resale?
4. Get Pre-Approved – Strengthen your offer with financing ready.



Ready to Buy Land in Texas? Austin Capital Mortgage Can Help!

Whether you’re looking for raw land financing, construction loans, or long-term investment properties, our team specializes in Texas land loans with competitive rates.