Use Savings to Buy Home or Land

If you can find a lower priced smaller home (starter home) that you can afford, you can go directly to buying a home. This includes pooling funds to buy an apartment building and converting it to a condo. Otherwise start buying land to build starter home. Land opportunities include land with building(s) on it with room to add building.

Examples of American Teenagers buying homes

14-year-old girl Willow Tufano is America's youngest landlord, with help from her Real Estate Agent mom

Chloe Green started working at 15 and bought $165k condo at 19. Her $900 monthly mortgage is less than the $1,300 she was paying in rent

Land Prices in Urban Area

Land price is typically higher closer to a city center. It is also higher in areas with better schools, more amenities, and lower crime rates. The city of Houston allows 1600 ft² lot for a single family home, and no limit for courtyard style. Since a duplex can be treated as a single family home, owning one unit of a duplex in 1600 ft² land means owning 800 ft² land. If land price is $20/ft², that 800 ft² would cost $16k.

It is more difficult to get a loan to buy land, especially when you are young. Consider borrowing money from family members if you've saved up 20% for a land purchase. Alternatively, you can put savings into a land fund to buy a share in land until you save up enough to buy your own parcel of land.

Land ownership may be used to replace down payment when building home. If you decide to move, you can sell the land (and the home if built), likely at higher price (use 1031 or similar to avoid paying capital gain tax), and buy another parcel of land or home.

Land Appreciation Example

This 3.2 acres undeveloped land was appraised by Harris County $25k in 2017 and 2018, in 2023 and 2024 appraised $279k. Land value increases as population increases, more people looking for housing and more land needed to build housing. Raw land, or undeveloped land, do not have road or utilities ready, and price is lower as an additional cost will be needed to get it ready. Developed land has road and utilities ready, typically market priced starting $50k per lot.

Land Appreciation Away from Cities

In rural area away from cities, land value is mostly based on agriculture yield. As this chart shows that soybean yield per acre has been increasing, land value per acre will also be increasing above inflation. Raw land far from the city could have prices like $0.1/ft² with sufficient rain for farming, or as low as $0.01/ft² for large sized desert land.

To build homes on rural land, water and wastewater treatment would be additional cost. If allowed, lowest cost would be composting toilet. If composting toilet not allowed, septic system could be low cost but typically about 1 acre land is required per home. For higher density, wastewater treatment plant would be required, but cost per home could be low with hundreds homes or more.

Make suitable land available for building starter homes

Should not have deed restriction on dividing into starter home size

Below $40/ft², even better if below $20/ft², to avoid much higher cost in the starter homes

Landowners consider selling or dividing their land for starter home building

Dedicated fund for pooling savings and investments to buy land and prepare for starter home lot size to sell to future residents or builders

Developers to prepare land into suitable lots for starter homes