Farm Rental

[bowhunternw]

Does anyone on here rent out a portion of their land for cash rent? The question I have, is do they subtract land that isn't actually farmed? For instance road R/W, ditches and little patches of trees. Or if you have 40 do they pay on 40 acres, and just figure all the irregularities into it.

The second part of the question is there any additional expenses as far as insurance or lease write ups?

 

[j-bird]

My place is roughly 150 acres and we rent roughly the 100 acres tillable to my wife's cousin. We simply have a 5 year contract with him where we define how much is farmed and the rental per acre. We also have statements regarding soil testing and the like to ensure the land is properly cared for. He pays for only what he uses. His contract also states that he is limited to "access for typical agricultural uses only". This means he does NOT have access to hunt or piddle fart around. We also include any buildings and other facilities he may be using as well. I have a general umbrella insurance policy of up to a million dollars for the entire farm. It is also in the contract that the renter will have X amount of insurance to cover him and any of those involved with the farming activities against injury and property damage. Our contract is also a fixed rate, no shares and the like. I get paid regardless if he fails or has a bumper crop. I am not a risk taker when it comes to things like that. We get paid in two installments. Once in the spring....before seed is put in the ground and then again in the fall, before the first crop is harvested. Our contract is a legal contract that the renter provides to us and we thus have our lawyer review to ensure we are protected as well. Don't do it based on a hand shake! Farming accidents can be very terrible..... Last fall was bad in our area last year. One farmer hell and broke his neck.....he is just now learning how to walk again. Another stepped into a bin auger and mutilated his leg to the point of it being removed. Make 100% certain the farmer and ANYONE associated with his farming assume 100% of the risk.

 

[Northbound]

Around here as many parcels have fence lines or small wooden areas the farmers use GIS parcel viewer (free online). Easy to draw box on the tillable acreage to figure rate.

My property landlocked a small tillable field adjoining mine but owned by someone else so I'm given rent on land I don't even own. Actually I might technicaly own it now as my renting out, has been maintaining it-I'm told there is some type of squatters rights that could come in to play.

I don't have a contract, I do a lot of business based on a handshake- prob not the smartest idea but it's never failed me. I am insured very well just in case my trust ever bites me in the ass.

When renting out it's not all about the dollar amount. I rent to a small farmer that pays half what I could get from a nearby factory farm. I value his treatment of the land enough to make up for lower compensation.

 

[Mortenson]

You can negotiate anything. Get it in your contract. Typically if a 40 has 35 tillable then you'd be getting paid rent on the tillable, for example.

 

[Boll Weevil]

In my situation, rent is paid only for tillable ground or cattle pasture. Gentleman's agreement and everything has worked out great for years.

 

[JFK52]

I rent out 12 acres of my land to a local farmer friend who grows alfalfa on it. We have a simple one page contract that states the time frame of the rental and the amount of rent per acre. I chose this farmer because he is a friend of 25+ years and also because he wanted to grow alfalfa on it. Other farmers who wanted the piece are corn cash crop growers. My farmer puts potash back on the land after every cutting. He watches my land for me as I do not live on the piece. It was an easy choice and so far I am happy with the arrangement.

 

[Nova]

We rent out 55 acres to a farmer we have know for many years. The old agreement with his uncle was for 55 acres and we just went with that. If I measure it today it's 46 acres, but we haven't asked for a raise in 10 years so it kind of comes out in the wash. We do have insurance and have the land in an LLC, but the farmer also carries his own insurance. Our contract is a simple email to him each spring asking if he is renting the 55 acres for X amount again this year. 4 years ago he put in alfalfa, so we kind of have him by the backside until he tills that under. We get along great and always discuss what will be planted.

 

[Telemark]

My property landlocked a small tillable field adjoining mine but owned by someone else so I'm given rent on land I don't even own. Actually I might technicaly own it now as my renting out, has been maintaining it-I'm told there is some type of squatters rights that could come in to play.

Adverse possession. 20 years in Wisconsin.

http://www.dkattorneys.com/publications.cfm?id=3645

 

[kl9]

Only the tillable acres. Multiple ways to estimate this.

I would make sure the farmer has his/her own insurance in addition to your own insurance.

 

[Red Picqua]

It is almost always on tillable acres. I will tell you that being a landowner the farmer is your BFF when it comes to hunting. The local rates are 100-125 an acre. I charge my farmer 25 bucks an acre. He will do anything for me and he is a VERY messy farmer, the kind I LOVE. I ask him to leave a row or two for cover on corn and he may skip the last cutting on alfalfa. Make it difficult and it will be the end of the relationship. My farmer just stopped someone this year as they were being a pain.. wanting more money, asking to leave crops, damaging crops, preventing access. he finally said, I AM DONE. Now they are begging him to come back!! My humble opinion.. bend over backwards as if you are renting your land for income, then you own WAY more land than most anyone I know. Unless you are renting 1000 plus acres, don't worry about the small stuff. keep it very simple... good farmers are hard to find.

skip the written contract.. a man's word is his bond in the farmers mind.

 

[H20fwler]

In my county the rent is normally for total acres of farm, the rent fee is negotiated between landowner and renter. They can work out tillable ground acres or total acres and set fixed price usually from $250-$350 an acre here depending on ground.

 

[bwoods11]

Your local FSA office should have maps showing how much tillable. I would recommend a contract on the tillable acres only, specified that you have hunting and recreational rights on all the acres. I have run across a couple situations where the farmer assumed he had the rights to hunt anything he rented....

Crop prices have jumped a bit, so farmers "should" be able to make a profit in 18...lots of variables there.

 

[Tree Spud]

The first question is what level of risk can you accept? You have someone on your property that is operating heavy rotating machinery and if injured could draw you into a lawsuit. You could either have them sign a waiver or add $2 mil umbrella to your insurance policy. Ask them to provide a certificate of their insurance.

A smart renter will only pay for the exact acreage they till and plant. Mine had it calculated down to 2 decimal points.

Just remember, Farmers are business people and can be just as honest or dishonest as any other person. In our area there are several well known farmers who will rent own land and then either fail to pay the rent or simply short pay.

It is never a bad idea to have the agreement in writing. Rent payment on what acreage, length of lease, no cutting or removing of trees, damage of gates, fences, etc. Ask your local Ag office for going rental rates.

My experience was disappointing. First year they paid as agreed, next 2 years were sob stories and every excuse they could offer to short pay me. Followinurth year I locked them out and thanked them for the 40 acre food plot. Found out later they were doing the same thing to my other neighbors and they were running out of land to rent.

 

[efras]

Looks like most of you have had good luck with gentlemen agreements and a handshake. In my area, it is rare to find good, honest farmers. Most of the farms around here were dairy. Probably half have shut down and the other half are losing money like crazy because milk prices are in the toilet.

I am a third generation "hobby farmer". I grew up farming and still farm on a small scale. I rent out my tillable land to local farmers. But I have had very bad experiences with local folks. I finally now have a good person leasing my land (he is very large operation). But for 10 years the gentleman's agreement with local small farmers usually ended up with me not being paid, and my land a mess.

I am thrilled for those of you who have found good relationships with friends/neighbors, but I had a hard time finding that. My advice is to just be careful and do alot of asking around and reference checks from others who have worked with the individual. Having bad lease partners is just too much stress for me to deal with. I had lawyer approved written leases and still ended up getting burned. There just isn't much you can do to get your money once it isn't paid. BTW land around here goes for about $70 per acre.

One thing that seems to work sometimes is keeping rent lower than market in exchange for more flexibility.

 

[Mortenson]

Not sure if it's been mentioned, but if you're seeking a cash rent agreement, get paid in full by 3/1. That'll solve the not getting paid part.

 

[Telemark]

There just isn't much you can do to get your money once it isn't paid.

How do you mean? Can't small claims court sort it out?

 

[chickenlittle]

Like anything, people don't know what they don't know and can put their land at risk. Sometimes you are not getting all the money you could while other times you lose more than just some present income. Logging, oil & gas leases, utility right of ways, renting ground. Educate yourself. Talk to people who can tell you what the downsides are and how to avoid them. Learn what the best practices are. Find out who you are doing business with. Check references. Get a contract with the right terms. Don't just listen to the people who are happy with the money they got...a bunch of them don't even know how bad they got screwed.

 

[JFK52]

Maybe I have watched too much of the "People's Court" over the years, but I will reiterate that it is a good idea to get a written contract. I can be as simple or complex as you want it. Any honest farmer will not hesitate to sign one. In my instance, my farmer friend was the one who wrote up the contract. He wanted a 10 year commitment as he was growing alfalfa in the rented field. I was happy to give him that length of time.
I have taken multiple does out of the edge of the alfalfa field. It is a great food source from early spring to hard frost time. He takes three cuttings off the field, which leaves it young and tender for the deer constantly.