Do you have plans of buying and owning land in Iowa? Are you wondering whether it will be the right move? This guide has the answers.
Is buying and owning land in Iowa something you should consider? Is it a solid investment idea? Should you invest in land in Iowa? Buying and owning land in Iowa comes with both pros and cons.
The Pros Are:
- A Low-cost Investment
- Tangible Asset
- Low Maintenance Needs
- A Secure Investment
- Plenty Of Opportunities To Utilize The Land
The Cons Are:
- No Immediate Income
- A Smaller Buyer Pool
- Minimal Tax Breaks
If you are looking to invest in land in the Midwestern U.S, then Iowa is one of the states to consider. But the question is, is buying and owning land in Iowa the right move? Well, this guide has the answers. We will explore the pros and cons of buying and owning land in Iowa. And with this information, you can then decide whether to proceed with the idea or not.
Our mission is to deliver helpful, informative, well-researched and factual content. And, we’ve assembled a team of researchers, journalists, and various other experts, to ensure we deliver on this key objective. So, every time you are going through any of our content pieces, you can be assured you are getting credible information.
Table of Contents
Iowa is a Midwestern state, bounded by Missouri to the south, Minnesota to the north, and Illinois to the east. It’s flanked by South Dakota and Nebraska to the North. Its capital Des Moines is located in the south-central part of the Hawkeye State. Its name is derived from the Native American tribe known as the Iowa tribe, which once inhabited this land.
The Hawkeye State is currently one of the leading states when it comes to farmland. In fact, 90% of its land is purely devoted to agriculture, making it one of the top states in the nation in agricultural production.
With its ample precipitation, gently rolling hills and well-drained soils, almost all types of crops can grow in this crop. However, corn remains the number one crop in this state. In fact, Iowa is currently the leading producer of corn in the U.S.
Besides its strong agricultural production, Iowa is also renowned for effective health care, a thriving economy and a low crime rate. It also enjoys four seasons. But, the weather is friendly throughout the year.
Pros of Owning Land in Iowa
As you can see, Iowa looks like a great place to buy and own land. And this begs the question, is buying and owning land in Iowa a good investment? Here are some of the pros of buying and owning land in Iowa.
Land is a cheaper investment, compared to the majority of the other options. You will only need to save up for a couple of months to raise enough money for buying and owning land in Iowa.
So, if you are looking to venture into the real estate industry and you are looking for a low-cost investment to help you get started, then you should consider buying and owning land in Iowa. And if you manage to land a nice piece of land, you can resell it later for a profit. You can then use those profits to buy bigger pieces of land, which you can later flip.
Land Can’t Be Destroyed or Stolen
Land remains one of the most secure investments out there. And the main reason behind this is that it can’t be stolen or destroyed. If you buy a commercial or residential building, it will wear out with time or even get destroyed during adverse weather conditions.
Furthermore, raw land is invulnerable to damage, theft or any form of destruction. But when you invest in land in Iowa, you won’t have to worry about such issues. So, whether you are a seasoned or a budding investor, buying and owning land in Iowa provides you with a secure investment, which comes with lots of peace of mind.
Low Maintenance Needs
Another benefit of buying and owning land in Iowa is that you won’t have to worry about maintenance. Undeveloped land comes with minimal maintenance needs. After buying it, it will remain the same for years to come. At the same time, it will be appreciating constantly. Probably the only maintenance that your piece of land in Iowa may need is fixing the fence occasionally. And, this is something that will only cost you a few dollars.
Commercial and residential buildings, on the other hand, require constant maintenance. If you invest in such properties, you have to attend to leaking roofs, plumbing issues, repair damaged walls, mow the lawns and repair the driveway, just to name a few. But when you buy and own land in Iowa, you will never have to worry about such issues.
Land is a tangle asset. In short, you can touch it, see it, and feel it. And this is not the case with other investments like ETFs, bonds and stocks. Furthermore, in case you need a loan to do something, you can use the land that you own in Iowa, as security.
And, finding an institution or individual to give you the loan won’t be an issue, since they already see you have a valuable and tangible asset as security. If you were to approach an individual or institution to give you a loan with bonds or stocks as security, you will struggle to find a lender.
Plenty of Opportunities
Buying and owning land in Iowa gives you multiple opportunities and options to explore. With land, you are at liberty to do as you wish with your investment, as long as you operate within the rules and regulations. Some of the options to explore include:
Buy and Hold
If the land that you’ve purchased is located in an area that has strong growth potential, then you can simply hold it for a while. And as the area grows, your vacant piece of land in Iowa will also be gaining value. So, when you decide to sell it, you can expect to earn decent profits. You can then use the profits you’ve generated from this sale to purchase land in a similar place and repeat the process.
Flip the Land
Land flipping entails buying land at a low price and then selling it at a higher price than you bought it. The goal of this strategy is to identify cheap or undervalued land in Iowa, buy it and then sell it at a higher price.
Develop the Land
Another option to explore with your piece of land is to develop it. And when it comes to developing the land, the possibilities are almost endless. It all depends on the amount of money you can afford to invest.
For instance, you can build apartment complexes on the land, a car wash, campground, RV park, biking course, camping cottages, boat storage, dog park, private park, wedding garden, or shooting range, just to name a few.
And by owning land in Iowa, you will never have to worry about an owner refusing to renew the lease or changing the terms of the lease. However, you should note that developing land is quite expensive. But, if you have the resources, then you should go ahead.
By developing your land in Iowa, it will start generating income for you. And at the same time, you will have increased its value. In case you decide to sell it, later on, you can expect to get a decent return on your investment.
Farm the Land
As we mentioned earlier, Iowa enjoys ample precipitation throughout the year. Also, this state has rich, fertile soils, which are well drained. Hence, it has the optimum conditions, needed for agriculture.
So, if you love farming, then you also have the option of growing crops or raising livestock on your land in Iowa. While corn is the leading crop in this state, you also have the option of growing others like soybeans and oats.
As for livestock, you can raise beef cattle, dairy cattle, calves, turkeys, hogs, broilers and layers, just to name a few. Agriculture is a billion-dollar industry in Iowa. And by farming on your land, you get a chance to grab a piece of this pie.
Lease the Land
If you don’t have the money to develop or farm your land but you don’t have plans of selling it any time soon, then you have the option of leasing it. Leasing the land is a great means of generating passive income from it. You can then use the money you’ve raised from this method to offset its taxes and other fees.
Cons of Owning Land in Iowa
All forms of investments come with potential drawbacks. And land, certainly, is no exception. Here are some of the potential disadvantages of buying and owning land in Iowa.
Unless you have plans of flipping your land or leasing it, it will not generate you any income in the short term. And this means that your money will be tied up in this investment, for quite some time. Hence, when it comes to buying and owning land in Iowa, you should only pursue this investment if you can afford to have your funds tied up for quite some time.
Smaller Buyer Pool
Compared to residential homes or commercial buildings, there’s generally a smaller buyer pool for raw land. And this smaller buyer pool means the demand is low, making land a cheaper investment for most people. However, the smaller buyer pool can also work against you. If you were to resell your land, it may take you longer to find the right buyer, compared to residential or commercial buildings.
So, if you have plans of reselling the land, then you should make sure you buy it in the developing areas of Iowa. Finding a buyer in such areas will be easier, compared to buying land in rural or remote areas.
Low Tax Breaks
Undeveloped land as an investment comes with minimal tax breaks. For instance, if you buy the land in cash, then you won’t benefit from a mortgage interest deduction. Other tax deductions that you may miss out with vacant land include maintenance and repairs, utilities, professional and legal services, insurance, advertising costs and depreciation.
Considerations when Buying Land in Iowa
The benefits of buying and owning land in Iowa are immense. But, before you buy land in Iowa, there are some key factors to consider, before you make any commitments. These factors will considerably determine the value, development potential and desirability of the land. The main factors to consider when buying land in Iowa include:
Zoning refers to how a particular piece of land should be utilized. So, whether you are planning to put up commercial buildings, a retreat center, camping grounds, residential units, a ranch or any other use you may have in mind, you should ensure the local zoning laws will allow you to utilize your piece of land the way you may want to.
A phone call or a visit to the local planning and zoning department should provide you with all the information on the zoning classification of that area. And with this information, you can then determine whether to proceed with the purchase or not.
Another important consideration when buying and owning land in Iowa is the issue of road access. Whether you are planning to flip the land or develop it, you can’t afford to overlook the issue of land access. If you are planning to flip the land, you can expect potential buyers to ask about road access. And if the land lacks road access, then this issue alone is enough to drive potential buyers away.
On the same note, if you have plans of developing the land, then you will need road access to bring in the supplies. So, if it doesn’t have road access, then it will be almost impossible to develop it since you can’t bring in the necessary supplies.
Access to utilities is also a key factor to consider for someone with plans of buying and owning land in Iowa. Ideally, the land that you buy should have access to vital utilities such as potable water, electricity, and sewage disposal.
Without access to these key utilities, developing the land or farming it will be next to impossible. While there are alternatives to these utilities, installing and maintaining them can be extremely costly.
Wrapping It Up
Buying and owning land in Iowa comes with numerous benefits. But, to enjoy all these benefits, you need to know the best place to purchase land. So, you will need to do thorough research. Also, you should conduct extensive thorough due diligence to ensure you are dealing with a credible seller.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down. Since then, we’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans mostly in the western United States. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling