Pros and Cons of Buying Land in Minnesota

As average farmland values across Minnesota rose over 8% last year to surpass $7,500 per acre statewide according to 2022 USDA data, competition for acreage intensifies. With the state’s rich glacial soil still allowing impressive corn and soybean yields supporting robust agricultural markets when managed sustainably, farmers and investors continue targeting land. However, Minnesota’s varied terrain and diverse county regulations create nuances in development rules, taxes and production potential based on location. This can complicate decisions for buyers debating parcel purchases spanning prairie, transition and forested zones. Carefully weighing pros like appreciating values and soil productivity against cons like harsh winters and zoning unknowns proves vital before committing capital to Minnesota land purchases for farm, recreation or other usage.

Introduction to Buying Land in Minnesota

Before jumping into the pros and cons, some background on buying land in Minnesota. The state has a total land area of over 80,000 square miles, much of which is privately owned rather than state or federally owned public lands. Land prices can vary greatly based on factors like location within the state, land use type, access and frontage to lakes/rivers, whether improvements like buildings are included, and more. According to experienced land buying companies, it can typically take 1-2 years to sell vacant recreational, hunting, or investment land on the open market. This is why some landowners look to sell more quickly to reputable cash land buyers. Selling land does often require significant marketing and negotiations to try to obtain full market value.

Pros of Buying Land in Minnesota

Scenic Natural Beauty

Minnesota lands often include or are located near some of the most pristine lakes, forests, and natural areas in the Midwest region. The state is called the "Land of 10,000 Lakes" for good reason - scattered glacial pothole lakes number even more than that. Iconic Lake Superior - the largest freshwater lake in the world by surface area - forms the northeastern border with waters that feel almost oceanic in nature. 

Thick northern boreal forests full of conifers, aspen, and birch transition to oak savannas and eventually prairie grasslands and wetlands as you move from northeast towards the southwest of Minnesota. Dramatic bluff country with towering cliffs line portions of the Mississippi River valley which cuts through the central and southeast areas of the state. For those looking to buy recreational properties, hunting/fishing land, or just enjoy scenic views Minnesota offers tremendous natural beauty and abundance.

Four-Season Recreational Opportunities

In addition to lakes and rivers, Minnesota boasts an extensive state parks system with parks like Itasca, Minnesota's oldest state park located at the headwaters of the Mississippi River. Fantastic networks of hiking and biking trails crisscross the state, including long distance trails like the Superior Hiking Trail that runs over 300 miles along Lake Superior's dramatic ridgelines and cliffs. 

From downhill skiing and snowboarding at destinations like Lutsen Mountains and Spirit Mountain to glorious cross-country skiing through snow-blanketed forests and meadows once winter arrives, Minnesota lets one stay active year-round. The state also has a very high number of golf courses per capita, numerous campgrounds for summer camping getaways, extensive fishing piers and public accesses, and many other recreational facilities beckoning you to get outdoors. Those looking for four-season recreational and vacation properties will find it easy to stay busy regardless of the season in Minnesota.

Hunting and Fishing Paradise

Outdoor sportspeople from across the country flock to rural and wooded northern Minnesota each fall for its highly regarded hunting opportunities targeting deer, black bear, grouse and other species. Meanwhile anglers are drawn by Minnesota's wealth of lakes, rivers, and streams harboring premier gamefish like walleye, northern pike, smallmouth bass, crappies, lake trout, and more. Native brook trout hides in remote ponds and creeks. 

Numerous stocked trout streams and urban fishing ponds provide easy action as well. Wetlands full of ducks and geese attract waterfowl hunters from September through November. While accessible public lands provide opportunities for all, buying a private parcel surrounded by public land can offer exclusive private access as needed to get away from hunting and fishing pressure. For hunting, fishing, and overall wilderness enthusiasts Minnesota offers a true paradise worthy of exploration.

Farmland Investment Potential

While forest and wetlands dominate northeastern Minnesota, rich agricultural areas spread across southern and western parts of the state. Fertile soils and a temperate climate (by Minnesota standards) provide prime conditions for growing crops like corn, soybeans, wheat, sugar beets and more. Minnesota farmers produce tremendous bounty from the land each year. 

For investors or farmers, quality Midwestern farmland available in Minnesota can present a good long-term real estate investment. Especially as global concerns rise over increasing population levels and corresponding food production needs in the coming years, farmland represents a tangible asset projected to appreciate over the long run. One can also generate annual income by renting quality farmland to area farmers.

Natural Resources

Various natural resources found in Minnesota present additional monetization options for land buyers beyond typical recreational land uses. Iron ore has long been mined from the taconite deposits north of Duluth and the mines of the Mesabi Iron Range. Southeastern Minnesota has seen a boom in mining high quality silica sand ideal for use in hydraulic fracking applications in North Dakota and other oil-producing shale formations. 

Limestone quarries in southeast Minnesota also produce aggregate materials used extensively for regional road construction projects. While tightly regulated, Minnesota land owners can occasionally benefit from royalties or one time payments related to sale of extraction rights on their properties depending on what natural resources exist below the surface.

Low Property Taxes

Compared to most other states, Minnesota has relatively low property tax burdens, especially for more remote recreational hunting land or forest land located well outside any municipalities. Improved properties and farmland may see slightly higher tax obligations, but overall Minnesota's property tax scheme helps make ongoing ownership costs very affordable for the right types of rural land investments. Land buyers focused on minimizing recurring taxes may find Minnesota more attractive than faster-growing regions seeing larger property tax creep.

Cons of Buying Land in Minnesota

Harsh Winter Climate

The same pristine northern forests and abundant lakes that draw so many to Minnesota also come with an intensely frigid winter climate from November through March most years. While winter recreation is world-class, remote properties can be challenging to access or utilize during the deepest parts of winter. 

Even improved properties need to consider aggressive insulation, backup heating systems, ice dam prevention, and snow/ice clearance from roofs and entryways to comfortably withstand Minnesota winters. Hardy souls embrace the seasonal changes, but those less fond of extreme cold may find the winters an unpleasant aspect that should be carefully considered before buying land.

Regulations Around Land Use

Depending on location, Minnesota lands may fall under environmental, shoreland, or other regulations around vegetation removal, wetland alterations, construction/development, septic systems, etc. State departments like the DNR as well as federal agencies may need to approve or permit certain activities on private lands - especially anything impacting sensitive shorelands or wetland areas that make up much of Minnesota's iconic landscapes. 

While not always burdensome depending on the type of land use planned, buyers should familiarize themselves with applicable regulations so there are no surprises down the road. Some educational assistance is often available from realtors or government offices.

Remote Access Can Pose Challenges

Particularly alluring remote recreational lands far from any major towns or frontage roads often come with accessibility challenges depending on weather and road maintenance schedules. While township or county snowplows do eventually service even the most rural roads, owners cannot always rely on being able to access remote parcels for periods after major snowstorms. Unimproved roads and trails may become completely impassable at times requiring short term patience. Remote aspects attracting buyers in the first place like ample solitude and privacy have their trade-offs in terms of accessibility considerations.

Ongoing Ownership Costs

While favorable property tax rates were highlighted earlier as a pro, land buyers still need to budget for recurring ownership costs that add up annually beyond just taxes. Road or trail access maintenance, weed control, brush clearing, tree/storm damage removal, utility access, gate locks or cameras for security, and liability insurance premiums may all apply depending on the property specifics and owner preferences. 

Some properties enrolled in special conservation programs may have specific land management obligations as well in order to keep enjoying related tax advantages. Running through an estimated pro-forma budget will help set clear expectations around total costs.

Complexities Around Selling Land

The company highlighted earlier cautioned that selling rural Minnesota land on the open market is often complex and time intensive for owners. Reasonable offers frequently come in well below unrealistic asking prices set too high based on an emotional connection to the land or misplaced optimism. Serious buyers can be difficult to attract. 

Creative sales options like owner financing often become necessary to bridge gaps between what buyers can pay and seller expectations tied to memories and experiences a parcel holds rather than its objective market value. Owners eventually selling land in Minnesota should plan for patience and flexibility to find the right buyer.

Understanding All Easements or Liens

Some Minnesota lands have existing easements like public fishing access, conservation program agreements, utility access easements, or restrictive covenants from an original development that current owners may not even be fully aware they exist until attempting to sell their land. Due diligence during the buying process includes thoroughly researching and documenting any limitations tied to the land outside of zoning regulations. Surprises down the road when trying to sell or change land use after the purchase can present major headaches so buyers should protect themselves by fully understanding all recorded easements, agreements or liens upfront before closing.

Key Takeaways Around Minnesota Land Investment

We have just reviewed a sampling of pros and cons that should be carefully evaluated when considering buying land in Minnesota. Key takeaways include:

• Minnesota offers tremendous natural beauty with pristine lakes, lush forests, and incredible biodiversity attracting outdoor enthusiasts.
• Extensive state parks, recreational infrastructure, and noted hunting/fishing opportunities exist across the state supporting very active four-season lifestyles.
• However, bitterly cold and snowy winters, regulations around land use, remote access challenges, and buying/selling complexity present legitimate downsides too.

Performing due diligence around locations under consideration, zoning restrictions, pricing comparables for recent land sales, easements or encumbrances, tax obligations, ingress/egress for properties, road maintenance expectations, and other factors is strongly advised before buying any land in Minnesota.

Understanding benefits alongside risks and disadvantages will set realistic expectations around owning land in this picturesque state. Consulting knowledgeable real estate professionals or land companies can provide localized expertise as well during your search.

Final Thoughts

Deciding whether or not to buy land in the scenic state of Minnesota means carefully weighing a variety of pros and cons explored throughout this article. From stunning natural landscapes beckoning outdoor exploration against a harsh winter climate limiting seasonal access to winding regulations juxtaposed with excellent recreational infrastructure, the state presents a complex balance of alluring attributes and real challenges. Perform thorough upfront due diligence on any properties you are evaluating so you enter into a purchase well informed. Set clear plans around intended use while also budgeting for ongoing costs and considerations that come with land ownership. No state is perfect across all dimensions, but by going in with eyes wide open to the full picture, buying land in Minnesota can prove both financially and personally rewarding in the long run for those matched well with what this charming Midwest state has to offer.

Frequently Asked Questions (FAQs)

How expensive is land in Minnesota? 

Land prices vary considerably across Minnesota based on factors like location and whether improvements are included. In 2022, the median sales price for vacant recreational land was around $3,300 per acre in northern Minnesota and $7,900 per acre in southern parts of the state. Improved lakefront parcels can sell for $10,000 per acre or higher.

Are taxes high in Minnesota for owning land? 

Compared to most states, Minnesota has relatively low property tax rates - especially for undeveloped hunting or recreational lands in rural counties. Typical effective tax rates range from 1-2% of assessed value. Minnesota also does not collect sales tax on real property transfers.

What types of land are best for hunting and fishing access? 

The most coveted lands in Minnesota for hunting and fishing provide access to wooded and agricultural areas holding deer, grouse, turkey and other popular game species as well as lakes/rivers/streams with walleye, bass, trout and more. Public lands surround private parcels can maximize recreation options.

How long does it take to sell land in Minnesota? 

Industry professionals report that average market times run 1-2 years for most vacant recreational or raw land in Minnesota. Prime parcels or those priced competitively can sometimes sell in 6 months. But overpriced land or challenging properties may take 3+ years to find the right buyer.

What restrictions apply to buying land in Minnesota? 

Minnesota does not have any specific residency requirements around land ownership for individuals or corporations/LLCs except that an out-of-state entity must register with the Secretary of State before transacting real estate deals. Some agriculture parcels enrolled in special-use tax programs impose minimum ownership periods.

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