First Time Land Buyer Part 1

Key Takeaways: 

• Establishing early on what kind of property you want and what you’ll use the land for is an important step to ensure you find the acres right for you.
• Consider factors like the terrain, soil type, current structures on the property, flood zones, and whether the land already has utilities and water set up. Also identify what exemptions, if any, the land currently has.
• Whether you should go with a land loan or traditional mortgage loan will depend on your individual situation. It’s important to work with an experienced lender who knows the ins and outs of each option.

This content has been updated as of March 2026.

In this video, we give a high-level overview of what you need to know to purchase land, especially if you’re a first-time land buyer. Part 2 can be viewed by clicking here.

If you’re looking to buy a piece of rural real estate in Texas, here are some things to know.

How to Buy Land as a First-time Buyer 

First, it’s important to define what type of property you’re looking for and the intended use of the land. Options include agricultural use, such as raising cattle, growing crops, haying, or hunting. You might also be looking for acreage where you’ll build a home.

The region of Texas in which you’re concentrating your search might impact how many acres you’re able to afford. Check out our most recent Texas land pricing guide to get an idea of what falls within your budget.

Regardless of property type or region, it’s important to find a broker that specializes in that area. The process of searching, contracting, and closing on a property will be much smoother if you work with an experienced and knowledgeable broker.

You and your broker will have a list of things to consider as you search for the perfect piece of land:

• Depending on what you’re wanting to use the land for, you’ll want to consider the terrain, soil, elevation, wildlife, and vegetation.
• Utilities will be important no matter how you plan to use the land. Does the property have utilities and water? Or is that something that will need to be added? How much would that cost?
• Are there any current structures on the property?
• Is the property in a flood zone? A flood zone could be a deal breaker for a home site.
• Is there legal access to the property?
• Does the property currently have an ag exemption?

Is There a First-time Land Buyer Loan?

After deciding on which acres you want to purchase, you’ll want to line up financing for the property. 

If you’re a first time land buyer, it’s natural to feel overwhelmed about where to start. You’ve probably got a hundred different questions: What kinds of loans are available? Which loan is best to buy land? How much down payment is needed for a land loan?

To get all the right answers, you’ll want to work with a lender who has expertise with agricultural and rural land. They can help connect you with the right loan products that can make your first land-buying experience as smooth as possible. 

At the federal level, there is support available for new landowners planning to use their acres to farm. Each year, the USDA Farm Service Agency sets aside money to dedicate to farmers and ranchers in their first decade of ownership. For example, “Beginning Farmer” direct and guaranteed loan programs are available, either in the form of land or operating loans.

What’s the Difference Between a Land Loan and Mortgage Loan? 

When you meet with your lender, you’ll also discuss how land loans differ from traditional mortgage loans:

• The down payment for land financing typically begins at a minimum of 20%.
• The interest rate can be locked in for anywhere from 1 to 20 years.
• Interest rates on raw land will differ from conventional mortgage rates.
• Borrowing money from a co-op could help lower your borrowing costs through a cash-back dividend.

Relationship Managers at Texas Farm Credit can walk you through the entire financing process. We’ll discuss estimated rates, terms, down payments, and monthly payments.

We can also customize options based on the type of land you plan to purchase. Providing various financing options and helping you work within your budget are our specialties.

Whether you’re a first-time land buyer or an experienced landowner, Texas Farm Credit can help every buyer finance or refinance their dream property in the country.

Give us a call and let’s talk!

Frequently Asked Questions

How do I buy my first piece of land?

To buy your first piece of land, begin by locating the ideal property, research and learn as much as possible about the land and its history, apply for a land loan or arrange alternative funding, contact the property owner or realtor, sign the necessary paperwork, and verify clean title. Especially if it is your first land purchase, you should enlist the services of an experienced and trustworthy real estate attorney.

What do I need to know about buying land in Texas?

Before buying land in Texas, learn all relevant details and facts about the property such as the tax valuation, historical use, exact shape and size (area-to-perimeter ratio), and usage restrictions. It’s also wise to become familiar with the owners of neighboring properties, as well as the former owners of the property you’re considering.

Is buying land a good investment in Texas? 

Any investment comes with risk. But in general, investing in land is a smart idea, since it’s an appreciating (and limited) asset. Land value tends to increase the longer you hold onto it, so this is more of a long-term investment strategy. 

Where in Texas is land the cheapest? 

Average land prices vary widely across the state, so there’s something for almost anyone’s budget. In general, the average cost of a Texas acre is about $5,100. Acres in the Dallas-Forth Worth area can range up to $15,000/acre for pasture acres, while acres in the Panhandle and South Plains average about $1,844.