Owning land is not only an exciting goal to build towards, but it can come with big rewards. So what are the pros and cons of owning land in North Dakota?
If you have ever seen yourself purchasing land for your recreational hobbies like fishing and hunting, or you have always dreamed of owning your own farm. Then you may want to consider some of the opportunities the state of North Dakota affords to potential buyers. But before anyone can consider making such a large investment, it is important to fully explore what you are signing up for when purchasing land in North Dakota.
Some of the pros and cons of owning land in the state of North Dakota include larger plots of land with lower purchase prices, lower income and property taxes, and many wonderful corners of the state where people can enjoy activities like hunting and fishing, camping, and snowmobiling.
When you are first starting to begin your land purchase search, how do you know where to begin? Where should you look if you are not from the area? What happens if your primary property is located in a different state and you only want land for recreational fishing and hunting? These are the types of questions that can become overwhelming for any individual.
Let us take an introductory look at some of these types of questions and more as well as some of the best places to purchase land in North Dakota. Another benefit we can look at is the lower tax rate that the state has in comparison to other places in the country.
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Where are the best areas to purchase land in North Dakota?
North Dakota is a unique state that some people may dismiss as insignificant, however, the land-owning potential there is something that you may want to consider. North Dakota has a massive amount of open land that many individuals like to use for farming, hunting and fishing, and various other enjoyable activities. The state also offers some considerable tax advantages, lower land values, and the potential for operating a profitable agricultural business.
It is important to first then consider the main purpose that you would like to use the land when deciding where to begin your search. Different regions of the state have different benefits for farming, hunting, fishing, and affordability. Let us take a closer look at some of the different regions of North Dakota and what they have to offer in terms of farming, hunting, fishing, and affordability.
Best farmland in North Dakota
Farming in North Dakota is big business. The agroindustry in the state is massive. With approximately 90% of the total land use devoted to agriculture, you can see that large corporations and smaller family farms have played a large role when it comes to living and doing business on North Dakota's land. Within the state, there are five distinct geographic areas that contain their own distinct features that may make the land more appropriate for different types of crops, animals, and uses. Let us take a closer look at those four different distinct regions.
Missouri Slope and Badlands
- Missouri Slope and Badlands are well known for their sunflower and alfalfa production when it comes to crops.
- When it comes to raising animals, the region is mostly used for the grazing of beef cattle, dairy cows, and sheep.
- Wheat, oats, and lentils are commonly grown here as well as flaxseed, and dry peas.
- Missouri Coteau is world famous for raising bees and producing honey.
- Drift Prairie is a region with dryer soil that is used for wheat, barley, canola, soybeans, and some corn.
- Similar to the Missouri Coteau region, the Drift Prairie is used for producing honey.
The Red River Valley
- When it comes to farmland, the Red River Valley is extremely fertile, however, sometimes it is prone to severe early spring flooding that can shorten the growing season. Although the floods can bring some deviation to the region, the tradeoff is the extremely fertile land that is great for sugar beets, corn, spring wheat, and soybeans.
- For animals in the region, The Red River Valley is known for its hogs.
Best hunting lands in North Dakota
North Dakota is known for its large white deer population as well as its copious amounts of pheasant, grouse, and partridge. Many hunters travel to the state in the fall to hunt in North Dakota, but the local population has been fortunate to grow up in it. In North Dakota, it is one hundred percent legal to hunt on any private lands that are not specifically posted and as long as they abide by the stricter hunting regulations. Additionally, the state of North Dakota offers vast areas of public lands that can be used for hunting as well.
If you are looking for white-tailed deer, then there is not a single corner of the state where you will not find excellent white-tailed deer hunting. Elk hunting is best in the western portion of the state as well as the northeast corner. Moose can be found all along the northern region as well as the border of Minnesota. If you are looking to hunt for mountain lions or bighorn sheep you may find larger populations in the western borderlands.
Bird hunting lands can be found throughout the entire state as well so it is not hard to find plots of land for sale where you can have access to excellent hunting opportunities.
Best places to live for fishing
Essentially, North Dakota is just as plentiful with fish as it is with deer, elk, and other popular hunting animals. The landscape is full of lakes, rivers, ponds, and streams with common fish species like northern pike, walleye, perch, and bass.
In the western portion of the state is the Missouri river which contains several reservoirs, lakes, and tributaries. The river system has plenty of coastline and small towns and cities in and around it for property purchases.
The eastern border with Minnesota and Canada has hundreds of lakes spread throughout the area that are well known for their walleye and pike fishing.
How much does land typically cost in North Dakota?
Land prices in much of the United States have steadily increased in the last two decades for much of the country. This includes farmland, residential, and commercial land prices. When you look back from 2022, although the market has fluctuated in some years, the trend has continued to climb.
For example, looking at farmland prices per acre over the last 20 years North Dakota has seen an increased average of approximately 9% per year. If you were shopping for farmland in North Dakota from 1998 to 2001, you would have seen the average price of farmland was somewhere around $400 per acre. That same farmland would now cost a prospective buyer closer to $1,930 per acre 20 years later if they were shopping for land in 2020. This kind of land price increase has been seen across all sectors and most of the country but where does North Dakota rank?
When it comes to the price of farmland in the United States, North Dakota ranks as one of the cheapest places in the country to purchase farmland. This means if you are looking for farmland to purchase to start growing crops, raising animals, or grazing cattle, North Dakota is a good place to start if you are looking for a budget-friendly price.
When it comes to farmland returns, North Dakota ranks at the very top compared to other states in the country. This means if you are looking for a higher rate of investment on your farmland purchase, by acquiring land in North Dakota, you may find it easier to make a generous profit on your crops and/or livestock when compared to other states.
When it comes to median home prices in North Dakota, the state ranks somewhere directly in the middle of the pack with a median home price of $193,000 in 2022. With an affordable median home price, anyone looking for properties with a preexisting home to relocate to may have plenty of options to choose from in larger metropolitan areas of Fargo, Wahpeton, Bismarck, Minot, and Grand Forks or smaller towns like Williston, Dickinson, and Jamestown.
Cost of living in North Dakota
North Dakota can offer a comfortable lifestyle for anyone looking to relocate to the state at a reasonable price. Although the state does not rank as one of the lowest cost places to live in the US in 2022, it again is not the highest. North Dakota ranks right in the middle again when it comes to the cost of living index for 2022. The state of North Dakota's cost of living index ranks at 98.2 which is just slightly below the national average.
Although North Dakota may not be as cheap to live in as some would think, other factors like lower property taxes can help to reduce the overall cost burden that North Dakota presents to anyone looking to purchase land and relocate to the state.
What kind of taxes are required to be paid in North Dakota?
If you are looking to purchase land in North Dakota and plan to become a resident, you may be wondering what kind of taxes you may need to be obligated to pay while residing in the state. There are individual, business, sales, and property taxes to be considered. Overall, North Dakota has a lower tax liability than a large portion of the country, however, they would be considered pretty much in the middle of the road when it comes to overall tax liability when you factor everything.
Individuals living and working in North Dakota may be obligated to report their earned income to the state and pay taxes. The graduated individual income tax rate ranges in North Dakota between 1.10% and 2.9%. Compare this to states like California with a 13.30% state income tax rate and New York at 8.82% and you can see that the North Dakota income tax rate is much lower than other places.
Although the individual income tax rate is much lower in North Dakota, there is a higher corporate tax rate that puts North Dakota somewhere in the middle when compared to other states and their corporate tax rates. So, if you are looking to start or relocate your business to the state of North Dakota, keep in mind that you may be subject to a corporate income tax rate of approximately 4.31%.
Sales tax is another cost that someone would want to concern themselves with before considering a relocation to a state. In North Dakota, the state sales tax rate is 5%. At 5%, this would put North Dakota into the top half of the nation for tax liability concerning sales tax. On top of that, local sales tax rates averages throughout the state at around 1.96%. Combined, to purchase common goods like groceries, clothing, and entertainment. You would most likely then be paying a 6.96% tax on your purchase.
Included in the state sales tax category are additional taxes like the state gasoline tax rate and the state cigarette tax. The state gasoline tax rate is at 23 cents per gallon as of 2022. If you are a smoker, then you will also be subject to an additional 44-cent tax on each pack of cigarettes you purchase.
Now anyone looking to buy and purchase land in North Dakota should be concerned about the state property tax rate. The state property tax rate in North Dakota again ranks somewhere in the middle of the average state property tax rate nationwide. As of 2022, the state owner-occupied property tax rate is at 0.95%. Compared to New Jersey at 2.47%, owning property in North Dakota is much cheaper in terms of tax reliability.
About THE AUTHOR
Brittany has been in the land business since 2020 when the world was starting to shut down because of COVID-19. 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