Invest in South Dakota - Sunflowers

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Frosty winter nights are (hopefully) behind us, so it’s time to kick your garden into gear. The summer months afford the green-thumbed among us to usher in the sunshine, fill empty patches with new flowers, drag out the hose, and make sure carefully planned arrangements stay hydrated in the summer heat.

South Dakota knows a thing or two about watering flowers, as the Mount Rushmore State has been among national leaders in sunflower production for many years. According to the Agricultural Marketing Resource Center, brutal winters in the Dakotas inhibit the spread of disease and crop-consuming insects, making them and other such states ideal for agriculture of this nature. Sunflower oil has become a popular means of incorporating healthier fats into one’s diet; the seeds add a protein boost to salads or other recipes; and the blossoms provide vibrant decoration options.

Farm land requires acreage, meaning vacant plots of land may need to be re-purposed, developed, or maintained for long-term agriculture. In truth, just about every real estate endeavor—from flower farms to mega-cities—begins in a similar manner. Real estate in a self-directed IRA continues to garner attention, but most people think of fix & flips projects, rental properties, or other such initiatives. Few self-directed investors consider vacant land as a potential retirement asset, but it can be just as lucrative as other real estate investments.

Once your IRA or 401(k) purchases land, you’ll have a number of options for optimizing your investment. Your plan could lease the land to another business (like a sunflower farm) and earn regular income in accordance with your lease agreement. You could also hold the land until it appreciates further, at which time you could flip it for profit. In both cases, earnings would bear the tax benefits of your retirement plan and would only be subject to unrelated business income tax (UBIT) if the investment was debt-financed.

Like a proverbial blank slate, an undeveloped piece of land can open the door to a broad range of possibilities for your self-directed retirement plan. To learn more about a real estate IRA, please don’t hesitate to give New Direction Trust Company a call at 877-742-1270 or send us an e-mail at