College Station, TX -- Land is selling like hotcakes in the rural Southwest.

But before you go West looking for a piece of the rock, proceed with caution. If the weather doesn't get you, costs, zoning, development rules, topography, land conditions, or beady-eyed land sharks very well could.

Credit the nation's longest economic expansion on record for more consumers seeking recreational expanse and rural homesites in Texas, spill-over investors from Phoenix grabbing land in Arizona and farmers and ranchers buying up spreads in New Mexico and Oklahoma.

Even with sales down in crop land markets outside many booming urban areas in the Southwest, those prices remained stable or continued to increase.

Prices remain the draw.

While places like Silicon Valley will put you back a cool million or more an acre, parcels in the Southwest range from a low of $42.50 an acre for native range land in New Mexico's arid West Central area to only $3,500 an acre for irrigated crop land in central Texas, according to "Rural Land Values in the Southwest, Spring 2000" recently released by the Real Estate Center at Texas A&M University.

"Driven by continuing economic prosperity, the spring 2000 land market continued to thrive. Range land markets remain strong, reflecting demand for recreational and development real estate, " according to economist Charles E. Gilliland and assistant Kelly Dryden, both university researchers who compiled the report.

But in the sweltering Southwest, a "hot market" isn't always cool.

Agricultural land wrung dry by consecutive summer heat waves is causing land experts to sweat the future about crop land in some hard hit areas.

"Continuing dry conditions and low prices for agricultural products are cause for concern among observers," the report said.

If you decide to stake a claim, however, the heat's not your only concern, according to tips from LandMagazine.com.

Costs

Until you turn a profit, expect a land investment to drain your wallet.

Right away you'll learn lenders consider land a speculative investment and will charge extra for their risk. You could manage cheaper seller financing, but you still won't have the same income or tax benefits to offset your expenses as you would with a property investment -- but you will pay property taxes.

If you plan to develop your plot, construction and financing costs won't be your only expenses. Environmental impact studies, general plan research, building permits and infrastructure development will be among many additional costs.

You may also face a fish-or-cut-bait developing deadline that adds the pressure of time to your dwindling cash flow. Your land loan lender could ask you to pay off that loan before you can acquire a construction loan.

If, to afford the land purchase, you forego other financial investments, say, a tax-sheltered retirement account, add that loss to the cost of the land.

Conditions

Experienced real estate agents who specialize solely in land sales can help reduce your risks. He or she will know of the best land buys -- parcels in an area of rapidly expanding commercial and retail activity with a shortage of housing and developable land. (Unless you just want to farm.) Such land gives you the option of selling later at a profit or developing the land with income producing property.

The agent can also help you avoid terrain challenged land, say, with major slopes, wetlands or other features that could make development, farming or resale too risky.

The agent will also help you learn about zoning restrictions, historical preservations, environmental concerns or species habitat issues. Your title search will provide information specific to the ownership of the land and any liens against the property, easements, and any access, gas, oil or mineral rights that come with the land.

Value

Making certain the land is worth the asking price requires the same steps required to determine the value of any real estate, with or without property. Obtain prices of other, recent, comparable land sales in the area. Check the classifieds for land sales to determine asking prices. Visit land sale events to obtain more cost information. Local builders and developers also have pricing information.

Scams

Finally, avoid get-rich-quick schemes, gimmicks, hard sell tactics and pressure to quickly close a deal. Don't be induced to buy by promises of future appreciation that can't be documented. If it sounds too good to be true, it probably is. Also consider hiring a real estate attorney experienced in land sales to go over the sales contract and all other documents related to your land purchase.

Published: September 15, 2000

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Broderick Perkins parlayed a career in old-school journalism into a contemporary digital news service that really hits home. The award-winning consumer journalist, originally from Wilmington, DE, is founder, publisher and executive editor of the bootstrap DeadlineNews Group, a Silicon Valley-based editorial content and consulting service specializing in residential real estate, consumer news and related editorial consulting services. The DeadlineNews Group includes the website, DeadlineNews.com, offering real estate editorial content and consulting services, and its back shop, the Deadline Newsroom, an open house on news that really hits home. Perkins obtained his formal journalism education from University of Delaware and a journalism boot camp, the Institute of Journalism Education at the University of California-Berkeley. He went on to 20 years of service as a daily newspaper journalist at the Wilmington, DE News Journal and San Jose, CA Mercury News. Perkins covered housing on the San Jose Mercury News reporting team which earned a General News Reporting Pulitzer Prize in 1989 for coverage of the Loma Prieta earthquake. He has also produced real estate, consumer and small business content for the Wall Street Journal, Los Angeles Times, RealtyTimes.com, Nolo.com, Better Homes and Gardens, the National Association of Realtors, Homestore/Move and Intuit/Quicken among more than three dozen publications. In addition to managing the DeadlineNews Group, Perkins most recently served as chief editorial consultant for Nolo's Essential Guide To Buying Your First Home, Nolo, and writes real estate television scripts for RealtyTimes.com.