Frosty winter nights are (hopefully) behind us, so it’s time to kick your garden into gear. Today is national Water a Flower day, so what better time to usher in the sunshine by filling empty patches with new flowers, dragging out the hose, and making sure your 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, which usually involves acquiring vacant plots of land and repurposing them for agriculture. In truth, just about every real estate endeavor—from flower farms to megacities—begins in a similar manner. Real estate in individual retirement plans continues to trend upward among alternative investment options, but most people think of fix & flips projects, rental properties, or other initiatives at various stages of development. Few self-directed investors consider vacant land as a potential retirement asset, but they can be just as lucrative as other real estate investments.
Once your IRA or 401(k) purchases such land, you’ll have a number of options for optimizing your investment. Your plan could lease the land to another business (say, 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 you wouldn’t be subject to unrelated business income tax (UBIT) provided the land isn’t debt-financed.
Like a proverbial “blank slate”, an undeveloped piece of property can open the door to a broad range of investment possibilities. To learn more about owning vacant land in your self-directed retirement plan, please don’t hesitate to contact New Direction IRA.