What to Do After Inheriting Land in New Mexico

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What to Do After Inheriting Land in New Mexico
By

Bart Waldon

New Mexico, known as the Land of Enchantment, is a beautiful state located in the Southwestern United States. With diverse landscapes including high desert plains, rugged mountains, and fertile valleys, New Mexico provides ample opportunities for land ownership and development.

If you have recently inherited land in New Mexico, you likely have many questions about what to do next. As the new owner of vacant land, you have several options to consider. This guide will walk through key steps to take after inheriting property in New Mexico so you can make the most informed decisions.

Understanding the New Mexico Real Estate Market

Before deciding what to do with inherited land, it’s helpful to understand current real estate market conditions in New Mexico. The state has faced some volatility in recent years. During the housing boom of the early 2000s, land values rapidly increased. However, values steeply declined during the 2008 recession.

The market has rebounded, but growth has been slower in rural areas. In populated cities like Albuquerque and Santa Fe, the real estate market is faring better. Recent data shows steady home price appreciation and more rapid sales.

Overall market conditions will impact the value of vacant land and the timeline to sell it. With an informed perspective, you’ll be better positioned to consider your options.

Evaluating the Land You Inherited

Once you have a broader view of market trends, the next step is gathering specifics on the inherited property.

First, pull all documentation you have about the land, including the deed, property survey, tax assessments, and any other records. This will tell you the precise location, acreage, and existing structures on the land.

Next, physically visit the property. Look for:

  • Accessibility to roads and highways
  • Terrain, elevations, bodies of water
  • Mineral, oil, gas, water or wind resources
  • Existing utility access
  • Potential boundaries or easement restrictions
  • Evidence of use/development by neighbors

Assess positives like scenic views and development potential along with challenges like remote access, odd parcel shapes, drainage issues and needs for clearing land, grading, or access roads.

Identifying attributes and constraints will help you establish an asking price and determine options. Consult local real estate professionals to compare area land values. Consider an appraisal to confirm market value based on location, acreage, and property details.

Exploring Options for Undeveloped Land

Vacant land offers more flexibility than properties with existing structures. Once you understand what the inherited property entails, explore options to find the one best aligned to your goals:

Sell the Land

With an appraisal price established, you can move forward with listing the land for sale. Reaching out to local real estate brokers familiar with the area is a good first step. And listing on national land selling sites expands your pool of potential buyers.

Be aware that marketing and selling vacant land typically takes significant time before securing a buyer. Industry research shows it can take between 1-2 years to complete a land sale. Factors like market conditions, pricing, and location impact timelines. Also recognize that full appraisal value is rarely achieved, usually 80-90% of that benchmark is considered reasonable.

As the seller, you’ll want to prepare the property to maximize its appeal. Removing any trash, debris or hazardous structures is advised. Consider boundary fencing or signage, securing access roads, clearing brush, and addressing any glaring property issues.

Develop the Land

If you have the means and timeline, developing the land may be an appealing option, especially if infrastructure like utilities and road access are readily available.

Development possibilities span residential spaces like a primary home, farmland or ranch, or recreational parcel for hunting and camping. Commercial concepts like storage facilities, RV parks or renewable energy installations may also hold potential depending on zoning allowances.

Significant resources are required to survey, design, permit and construct spaces on vacant land. Weigh costs against market demand for these property uses in the area before moving forward.

Donate the Land

Donating land can provide tax benefits while also giving back to your community. Conservation groups and land trusts accept property donations to preserve open spaces, protect wildlife habitats, and prevent commercial development.

First investigate if groups working in the area are open to land contributions. Most focus on environmentally sensitive parcels with access to trails, water resources or important ecosystems. If the property holds conservation value, donation may be feasible.

Land Leasing

Rather than selling the property, generating income through land leasing keeps you retains ownership while creating revenue. Common leasing options include:

  • Agricultural leases – Lease to local farmers or ranchers for grazing livestock or cultivating crops.
  • Hunting/recreation leases – Lease to hunting groups or recreational enthusiasts seasonally.
  • Cell tower/billboard leases – Lease a portion of land for installed infrastructure like cell towers or signs.
  • Mineral & resource leases – Lease underground or surface rights for mining, oil/gas or ranching.
  • Commercial leases – Lease for storage, RV spaces, event venues.

Evaluate potential leasing uses matched to attributes of the property and local market rates to project possible returns from these long-term agreements.

Sell to a Land Buying Company

Selling inherited property to a land buying company like Land Boss presents an alternative to traditional sales. Instead of listing a property and waiting undefined periods for a buyer, these companies purchase land directly for cash.

Land buyers have existing funds earmarked for acquisitions. This enables prompt purchases, often within 30 days or less. It bypasses the intensive marketing and waiting game with private buyers.

Additionally, land buying companies have the flexibility to purchase a wider range of rural properties. They are less strict on factors like odd parcel shapes, remote locations, terrain challenges and limited road access.

The trade-off is selling at a lower price point, usually 30-50% below market value. Land Boss and other legitimate buyers always disclose purchase offers upfront. No hidden fees or unexpected costs come into play down the road.

If liquidating land quickly is a priority or you wish to sell as-is without prepping land for sale, this option allows you to swiftly move on while recovering some land value.

Consult Specialists to Consider Options

The variety of options for inherited land can feel overwhelming to evaluate. Seeking advice from relevant specialists helps simplify your decision making:

  • Real estate attorneys – Have property titles, sales contracts and agreements reviewed to act in legal compliance as the new owner.
  • Tax accountants – Understand tax implications from any income generated from land leasing or capital gains from a profitable sale.
  • Land management agencies – State/local agencies provide resources about land regulations, usage allowances and development guidelines.
  • Real estate agents – Local agents offer area-specific insights on property values, sales timelines, buyer demand and preparatory requirements for sale.
  • Land appraisers – Certified appraisers properly evaluate acreage, placement and property features to establish pricing.
  • Surveyors – If property boundaries, easements or right-of-ways are ambiguous, surveyors map and document details.

As you weigh options for the inherited real estate, consult professionals qualified to address risks, pricing, regulations and more based on the New Mexico market.

Act in a Timely Fashion as New Land Owner

Addressing next steps for newly inherited land should not be postponed. Even if you plan to keep the property long term, take actions like:

  • Recording updated deeds with county offices
  • Paying annual property taxes
  • Monitoring land use to prevent adverse possession claims
  • Controlling erosion, overgrowth and access issues

Staying hands-off for extended periods can result in legal headaches if titles or property lines fall out of good standing. Minor preventative measures also protect the property’s future value should you decide to eventually sell or develop it.

Final Thoughts

Inheriting land marks the start of an exciting new opportunity. With New Mexico’s diverse landscape ranging from the Rio Grande Valley to soaring Rocky Mountain peaks, you may have a truly special property to envision future uses for. Or if selling for immediate returns is the goal, this guide outlines key real estate market insights and options to thoughtfully consider so you can maximize returns from the land in your preferred timeline. Using the protocol of researching attributes, formally documenting all details, having the acreage properly appraised and consulting real estate specialists will equip you to make the soundest decisions as a new land owner in New Mexico.

Frequently Asked Questions (FAQs)

What taxes and fees apply when inheriting land in New Mexico?

In New Mexico, there is no state inheritance tax. However, the land value will be assessed and property taxes will need to be paid annually based on assessed value and local county/city mill levy rates. There may also be capital gains taxes if you later sell the land for more than the market value at the time of inheritance.

Do I need to immediately transfer inherited property titles in New Mexico into my name?

It's recommended to record a new property deed confirming your inherited ownership with county offices soon after the previous owner passes away. This protects you legally if any liens, lapsed taxes, or claims arise against the land.

I inherited rural hunting land in New Mexico. Can I split and sell parcels of it?

Depending factors like acreage size, zoning codes, and access limitations may restrict subdivision potential. Consult your county planning office to see if breaking up and selling portions of inherited land conform to local regulations before subdividing.

A portion of my inherited New Mexico property has an oil and gas lease. How does this impact me?

If actively leased, you’ll receive continuing royalties from oil/gas extracted from your land. Under law, you must honor the lease term length signed by the previous owner. When renewing or establishing new mineral leases in the future, consult specialists to negotiate favorable lease rates and provisions.

Can I be liable for injuries or accidents that occur on land I recently inherited in New Mexico?

Yes, as the new property owner you can be held liable for injuries occurring on the premises. Mitigate risks by inspecting land for hazards, maintaining safe access routes, posting visible private property signage, and carrying ample insurance coverage like home/landowner insurance policies.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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