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What Does the Post-Pandemic Economy of Houston Look Like?

Published: 02-11-22 Category: General CRE

Specializes in providing actionable insights into the commercial real estate space for investors, brokers, lessors, and lessees. He covers quarterly market data reports, investment strategies, how-to guides, and top-down perspectives on market movements.

Houston is the kind of place where everyone can thrive. You don’t have to be a big fish to make it big in Houston; consistent effort will do just fine. Like other cities in the Lone Star State, Houston has a diverse population, a thriving business core, and plenty of affluent people that have chosen to make Houston their home.

The post-pandemic era for Houston looks great, and it invites others to take a good look at what opportunities might look like in Houston as well as the greater Houston metropolitan area.

Understanding Houston’s Infrastructure

The greater Houston area is really a place where industry and business ingenuity is truly celebrated, sought after, and encouraged. It’s a global city with a very diverse population in terms of ethnicities, religions, and cultures.

The weather is a bit stormy in the summer, but the winters tend to be incredibly mild.

While Texas’s weather is changing a bit, the strength of Houston’s business core hasn’t weakened yet. Major companies based in the Houston area include Phillips 66, Sysco, Baker Hughes, Kinder Morgan, Halliburton, and KBR.

Houston has multiple airports, including George Bush Intercontinental Airport, Hobby Airport, and Ellington Airport. Hobby Airport is a regional airport, while Ellington is used by the military and select government agencies.

What Are the Primary Benefits of Leased Land?

There are a few benefits of going for the land lease over buying land for sale in Texas. Business owners know that managing risk is the first key to discovering where the profit is. Putting too much money into a deal upfront can often destroy the chance of making money from it in the first place.

The value of testing business ideas is a strong benefit for lease options. It allows more flexibility compared to purchasing the land outright.

Monetizing Leased Land Options

There are a few ways that business owners typically monetize land for lease; we’ve included a few ideas in the list below:

Hydroponic-based gardening: people that want to build a gardening business without having to purchase land can use a vacant field to get started. This type of business tends to have a lower cost of entry compared to other business models, and demand is only continuing to grow.
Agritourism: business owners have found success with small hobby farms, camping experiences, nature experiences, bird watching sanctuaries, and other activities centered around bringing people into the greater outdoors.
Space to build metalsmithing or woodworking operations: business owners that can feed the demand for artisan wood and metal products find that it’s often easier to rent land for the workshop than hold out for a purchase.

There are plenty of other great ideas for land leases; the only limit is imagination and what can be worked out in a lease agreement. No two leases are exactly the same, and every property owner has different restrictions.

Best Places to Look for Land for Lease in Houston, TX

When we add in the surrounding cities and small towns of the greater Houston, TX area, we get a total area of over 10,000 square miles. That means that there are a lot of places to look for land lease options.

Where is the right place to start? Well, it depends on the idea for the land in the first place. Every plot of land has its own unique characteristics. Some land is just flat with no trees, while other lots are incredibly wooded.

Some lots will have natural features like ponds and slopes, while other lots will include buildings.

Identifying what land pairs well with business ventures will unlock where to begin looking. Yet it isn’t just about looking at the land features; the right location has to include access to people that can become the right customers.

Affluent Areas of Houston, TX

In terms of affluence, Houston has plenty of it. The metro-level GDP for the greater Houston area was almost $500 billion in 2017, making it the 7th highest metro area in terms of GDP in the country. Two dozen major corporations call Houston their headquarters, which in turn means plenty of established professionals settled into the city.

Some key affluent areas of Houston include The Woodlands, Katy, Sugar Land, League City, and Conroe.

The city of Houston works hard to maintain infrastructure, ensuring that the area’s residents can navigate not around the city but head out to the suburbs with ease. This type of flexibility is just another reason to consider opportunities in the Bayou City.

Do Issues Arise with Land Leases?

Despite all of the benefits of finding land for lease in Houston, TX, there are some downsides. It’s important to understand the risks, not just the rewards. Here are some concerns to consider:

The property owner has the final say. Sure, your basic rights to the property are covered by the lease agreement, but the owner can choose not to renew the lease.
Extra time is often needed to find the right land lease.
Only property owners benefit from the increased land value over time. Tenants don’t build equity, but tenants do have freedom of movement.

Weighing the advantages and disadvantages equally is key to assessing the value of leasing land around the Houston area.

Like All Things, Texas Land Requires Due Diligence

Land often brings people back to a simpler time in our country’s history, where things just didn’t feel so complicated. Yet the truth is that land can be as simple or as complex as you make it. Finding ways to profit off leasing land is right up there with any other venture.

If all things in life are inherently risky, then it’s up to us to define what risks we are all willing to take. Even if leasing land for an opportunity isn’t something that’s on your radar right now, this is great information to bring to a real estate partner that’s looking to expand or a fellow agent that’s looking to take their advice to the next level.

We’re all professionals here, and it’s never a bad time to help each other to achieve success on our own terms.

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