Owning Land In South Dakota: Pros & Cons

You may probably ask yourself whether buying and owning land in South Dakota is a good investment. This guide will explore the pros and cons.

Is buying and owning land in South Dakota an investment idea worth exploring? Is owning land in South Dakota something you should consider?

The pros of owning land in South Dakota include:

• Diverse development options
• Secure investment
• Affordable investment
• Lower maintenance

The cons of owning land in South Dakota include:

• Zoning restriction issues
• Lack of infrastructure

This guide will explore the benefits and drawbacks of owning land in South Dakota. So, if you have plans to own land in this state but are unsure whether it’s the right move for you, the information in this article will help guide you accordingly.

Our objective is to give our readers well-researched, trustworthy, helpful, and trustworthy information. And we’ve always delivered on this goal, thanks to our able team, made up of various experts from different relevant areas. So, in case you happen to come across any of our guides, you can be confident you are getting credible information.

‍Overview

Covering approximately 77,123 miles, South Dakota is the 16th largest state in the nation. It has an expansive coastline, fertile farmlands, picturesque mountains, sprawling fairies, and numerous lakes spread across the state.

The state enjoys four seasons, with mild weather in spring, warm, humid summers, cool, crisp evenings during fall, and moderate to extreme cold during the winter months. South Dakota has a thriving agricultural base, which is currently the largest industry in Mount Rushmore State.

Tourism is also a considerable revenue generator, bringing in approximately $2 billion yearly. Retail trade, manufacturing and the service sector industries are the biggest employers in this state.

If you are looking to invest in the real estate industry, buying and owning land in South Dakota appears like a great move. But is this the case? We will explore some of the pros and cons of buying and owning land in South Dakota.

Pros of Owning Land in South Dakota

If you are planning to venture into the South Dakota real estate industry, you have numerous options to explore. And buying and owning land is one of the available options. Buying and owning land in South Dakota is a great investment move. Here are some of the benefits of owning land in South Dakota.

Diverse Development Options

Once you purchase and own land in South Dakota, you will have numerous development options at your disposal. Some of the investment options that you can explore for your land include:

Building Residential and Commercial Properties

One of the development options to explore with your piece of land in South Dakota is building residential or commercial properties. If you have the finances to explore this option, you will have a steady monthly or yearly income, coming from the rental properties you’ve built.

As for the rental properties, you have two options to explore. You can decide to put up residential, multi-family or single-family units, which will be earning you monthly rental income.

Secondly, you can decide to put up commercial facilities like parking lots, office space, industrial facilities, and storage facilities. You also have the option of putting up recreational facilities like an RV park, lodges, driving ranges, water recreational facilities, shooting range, and campsites, just to name a few.

In case you don’t have the finances needed to build the residential, commercial or recreational facilities on the land, you can also lease it to someone else for an agreed period.

Regardless of the option that you decide to explore, the land that you own in South Dakota, you will be earning a steady stream of income. Besides, you will also be increasing its value.

Farming

Besides setting up commercial or residential buildings, you can also decide to farm on the piece of land that you own in South Dakota. As earlier mentioned, agriculture is currently the leading industry in South Dakota, thanks to its fertile, well-drained soils and decent climate for farming.

Some of the crops that you can grow on the piece of land that you own in South Dakota include field corn, soybeans, wheat, vegetables, alfalfa, and sunflower. You can also raise different types of livestock like beef cattle, chickens, pigs, dairy cattle, sheep, and turkeys, just to name a few. And selling your produce won’t be a problem in this state, thanks to its strong network of local and international markets.

Solid Investment

The demand for land has been growing steadily over the last couple of years. According to the National Agricultural Statistics Service, there was a price growth of approximately 7.8 percent for cropland, between 2021 and 2021.

And as you may probably know, land is a limited resource. It’s one of those few factors of production, which can’t be increased. Hence, the demand will always be higher than the supply.

So, when you buy and own land in South Dakota today, you can expect to earn substantial profits from it, once you decide to sell it later on, whether you’ve developed it or not. Simply put, land remains one of the safest investment options. With land, you can always expect to earn profits from it, even during harsh economic conditions.

Affordable Investment

Another benefit of owning land in South Dakota is that it’s a highly affordable investment. Vacant land has low expenses, compared to other real estate investments.

With land, you will not be paying utilities, unless you decide to develop it. Also, you won’t have to worry about mortgages. Furthermore, you will be paying lower property taxes, compared to someone who has purchased buildings. Also, the process of buying and owning land in South Dakota is much simpler and cheaper, compared to buying other real estate investments like residential or commercial properties.

Minimal Management Issues

One of the biggest benefits of buying and owning land in South Dakota is that management issues are minimal. Vacant land rarely needs any attention or maintenance.

With land, you won’t have to worry about fixing broken systems, mowing the lawns, fixing potholes on the driveway, repairing the roof, or other similar management issues that come with built properties.

In short, you will have an investment whose value is gradually increasing, without stressing about taking care of it. So, if you are an aspiring or established real estate investor that doesn’t have the time to deal with managerial and maintenance issues, then owning land in South Dakota will be a great move.

Build Your Desired Home

As mentioned earlier, owning a piece of land in South Dakota gives you several options to explore when it comes to developing. And apart from farming, and building residential or commercial properties on the land, you also have the option of building your retirement home on the land that you own in South Dakota.

And unlike buying a built home, the vacant land that you own in South Dakota gives you the freedom to decide the type of house that you want. You get to work with your preferred designs, for both the exterior and the interior. In short, you don’t have to choose one thing or the other or even make compromises, which is usually the case when you buy a built house.

Whether you prefer Cape Cod, French Country, Farmhouse, Cottage, Contemporary, Dutch Colonial, Federal Colonial or any other type of home style that you want, owning land in South Dakota gives you the freedom to build a home according to your desired style.

Cons of Owning Land in South Dakota

While owning land in South Dakota remains a great investment, it also comes with certain disadvantages. If you are planning to buy and own land in South Dakota, here are some of the cons to expect.

You Can’t Earn Immediate Income

When it comes to buying and owning land in South Dakota, there’s a high chance that you will go for the empty lots. After all, they are cheaper to purchase and readily available in several parts.

The main issue with owning vacant land in South Dakota is that it can’t generate immediate income. And as much as you are earning money from your land, you will still be required to pay its property tax.

Therefore, you either have to develop the property so that it can generate some income or cover the property taxes from your pocket. And both approaches require you to have some up-front capital. In case you don’t have this up-front capital, then owning land in South Dakota may not be the right investment to make.

Lack of Infrastructure

Cheap land for buying is usually found in rural, remote areas. The problem with such land is that it usually lacks support infrastructure like roads, electricity, internet, phone connectivity, water, and sewer.

So, if you are planning to develop that land, it’s highly likely you will have to explore other alternatives. And, such alternatives will be costly, thus increasing the cost of owning land that piece of land.

Considerations for Buying and Owning Land in South Dakota

At this point, you already have a clear idea of all the pros and cons of owning land in South Dakota. Also, you have all the information you need, to decide whether owning land in South Dakota is in your best interest.

If you have decided to go ahead and own land in South Dakota, there are several things to keep in mind, to ensure you end up with a property that is livable, buildable, and marketable. Here are the key factors to consider when it comes to buying and owning land in South Dakota.

Location

Location is, without a doubt, the most important factor to consider when it comes to buying and owning land in South Dakota. Regardless of what you intend to do with the land, location remains the most important consideration.

If you are planning to buy and own land for reselling, then you should make sure you purchase land in a location where it’s going to increase value fast – especially if you are looking to turn a profit as soon as possible.

If you are looking to set up a business on that piece of land, then you should ensure it’s within your customers’ range. In case you want to build your dream home on the land, then make sure you choose a location where you will enjoy spending your time.

Zoning

Zoning is also a key factor to consider when buying and owning land in South Dakota – if you intend to develop the property. At the end of the day, the zoning restrictions in the area will determine what type of buildings or development can happen on the property.

For instance, some areas may be zoned for agricultural use, industrial use, commercial use, residential use or a combination of any of these. So, before you go ahead to purchase and own land in South Dakota, you should first determine the zoning regulations in the area allow the type of development you have in mind.

Utilities

Access to utilities is often overlooked when it comes to buying and owning land in South Dakota. But, it’s a crucial factor to consider. Regardless of how picturesque a location is or how cheap the land is, if you can’t get access to electricity, water, sewer system, internet connectivity or telephone service, then it will be of no use to you.

Even if you don’t intend to develop the property, finding buyers who will buy it at the right price will also be an issue. So, make sure the property you intend to buy and own has access to these vital utilities.

Hazards

You also need to check for any potential hazards, which may affect your investment or the ability to find a buyer. For example, if you purchase land that’s prone to flooding or wildfires, you may be forced to spend more money to shield your property against these hazards.

Also, you should check whether the geology of the area can support the type of structures you intend to put up on the property if you are planning to develop the land that you are looking to buy and own in South Dakota.

Wrapping It Up

Overall, buying and owning land in South Dakota will be a great investment, regardless of what you intend to do with it. However, you should remember that land is a long-term investment, meaning it may not pay off immediately. So, if you are looking for immediate cash flow or an immediate pay-off, then buying and owning land in South Dakota may not be the right move for you. But, if you are looking for an affordable, low-risk investment with lots of earning potential in the future, then buying and owning land in South Dakota is the way to go.