Considering Future Land Use: From Agriculture to Development Potential

When buying land, you might have one plan for it today – but what about 10, 20, 50 years down the road? Even if you intend to keep it as a farm or a homestead forever, circumstances change. It’s wise to at least consider the future possibilities and potential of the land. Think of it as an exit strategy or legacy plan. Here’s what to mull over:

Development Potential: Is the property in the path of growth? For example, land on the fringes of a booming city or a fast-growing town might skyrocket in value as subdivisions or commercial developments expand. If you spot big road expansions, new schools, or employers coming to an area, that land could be subdivided one day. Even if you don’t plan to, it adds value. Check the comprehensive plans of nearby cities or counties for future zoning changes or highways. Sometimes they publish maps of future thoroughfares – if one might cut near or through the property, huge factor (for better or worse). If you’re buying remote ranchland far from anything, development potential is low (which might be what you want). But a place 5 miles outside a city of 50k people might be houses in 15 years. If that bothers you (or excites you as an investor), take note.

Subdivision Layout: If you ever did need to sell or break off pieces, how well does the tract lend itself to division? Ideally, it has multiple access points or long road frontage that could create smaller tracts easily. If all the frontage is on one end and the back is landlocked behind it, subdividing later might require building a road or an easement. Even if you intend to keep it whole, land that can be cleanly cut into a few parcels (for kids, or to sell part and keep part) gives flexibility. Some buyers intentionally buy more acres than they need with a plan: sell off 10 acres to pay down the loan, keep the rest. If that’s you, evaluate which 10 you’d sell – are they accessible and attractive?

Conservation and Agricultural Value: Perhaps development is the last thing you want. Then consider long-term ag or conservation uses. Could this land qualify for a conservation easement that pays you or provides tax benefits while ensuring it never gets developed? Some organizations or government programs pay for easements especially if the land has unique habitat or is in a watershed. If you want it to remain a ranch in perpetuity, maybe your heirs or future owner will too – but a conservation easement legally ensures it, at the cost of reducing development potential (and land market value). Not for everyone, but worth knowing.

Infrastructure Changes: Are utilities likely to improve in the area? For instance, if the area gets city water lines or sewer in future, that can open up higher-density use. A new highway exit can turn a quiet ranch into a hot spot for a gas station or housing. Conversely, if environmental regulations change (like groundwater restrictions or eminent domain for a reservoir project), land use could be forced to change. Try to foresee big known changes – reading local news, TXDOT plans, water district plans can give clues.

Mineral Development Future: Covered before, but think long term: even if no drilling now, could a future boom put wells on this land? If you don’t own minerals, that’s always a lurking possibility.

Family or Personal Plans: You might plan to hand this land to your kids. Will it easily split among them? Many a feud has started when heirs co-own land. One solution is ensure it can be partitioned fairly (like each child gets a section with equal features) or put it in a trust that dictates usage. Alternatively, think if you might want to carve out a piece later to sell if you need retirement cash. It’s easier if you planned for it (like bought a place with a small corner you could sell off without impacting your core homestead).

Resale Value Factors: If you had to sell in 5 years, what would buyers care about? Possibly the same things you did – water, access, etc. But maybe in 5 years, other factors matter too (like fiber internet, who knows). At least ensure there’s nothing that would severely limit another person’s interest. Example: if you buy a landlocked property cheap with just a handshake access, you might be fine short term, but selling it later with no legal access will scare off most buyers or lower value. Always maintain or improve the fundamentals (legal access, water rights, etc.) even if you personally can cope without them, so the land retains value.

Stay Flexible: Perhaps the best approach is to maximize your options. Keep the ag exemption up (saves taxes, easier to hold long term). Manage the land so it doesn’t degrade (overgrazing can take years to fix – bad for future sale). If you can, buy the minerals or at least ensure surface protections, so a future buyer doesn’t balk. If development comes knocking and you’re not interested, maybe a neighbor or land trust will be – but you being aware early means you won’t be caught off guard when the letter arrives asking to buy your ranch for a new subdivision.

But Don’t Speculate Unnecessarily: That said, be cautious about paying a big premium “for the future potential” unless you’re explicitly investing in that. Many have gone broke betting on land development that took too long. If the land doesn’t meet your needs now, don’t buy it solely on a vague hope that “someday someone will pay triple.” Use potential as a bonus in your calculus, not the only reason. When buying, wear two hats – today’s landowner and tomorrow’s investor. Make sure the property can adapt if needed, or that you have an exit strategy if life changes. The best land buys serve you now and set you up for the future. Think ahead so that whether you keep it forever, pass it on, or sell down the line, you’ll be glad you considered the possibilities rather than being blindsided by them.