Fair return

[Partners]

Guys are falling over themselves to rent in this area.just so the other neighbor doesn't get that land..so if things don't pan out for any given yr..to bad..they offered..pay up.most will be on the other side at some point in our lives.
We only rent 1 quarter.offered a minimum every yr.with bonus if prices go up or get a good crop.he is OK with that.trust on both sides.

[jamesb]

It is up to the guy renting to do the math of a sustainable rent level. We have rented lots of land over the years and the bottom line is that everybody has to make money. The guys that bided high for land rent didn't last long if the rates were too far above average rental rates in the area. What is a fair rent? We creep up in successive good years and have gone down in successive crappy years. I would say most landlords do not have a clue as to what the farmer puts into the land as far as cost of imputs. It is up to the renter to educate the land owner as to what the farmer has tied up in the land. Trying to keep anyone in the dark is not the answer. another thing I realized very early too, treat the different landlords similarly as they probably talk to each other and compare (most do)

[grefer]

I have never been able to completely understand why farmers expect to get land rented to them for less than the market is at. Why is it different than the farmer trying to get the most for his canola or wheat or you name it. The people who have land to rent have a commodity that you the farmer kind of require to run that over priced machinery over. Many of the landlords are retired farmers who have paid their dues and now are using the equity in their land to fund their retirement . Seems fair to me. Sorry but I dont understand all moaning and bitching about rent. I dont think there is a cartel of landlords forcing the rent up. Last time I checked it was farmers trying to grow larger that forced the rent higher. BTW I am not a landlord yet,I am the tenant,and probably will have to rent my land at a large discount to my intern.

[MBgrower]

for those of you who want to stop outsiders from buying farmland to cap land prices, are you also wanting controls on rental rates? As stated earlier, the right price is determined by what someone is willing to pay for it.

[bucket]

Sometimes landlords look at their investment and say if they sold it all they wouldn't get much return....and if they have farmed they know it's up and down....sometimes the headache of change isn't worth it....

If I have a good outcome for a year there is nothing stopping me from topping up the rent with a bonus....have done that....but my rents are handshakes going on 15 years. ....

[sumdumguy]

During the nineties and early 2000, rents never got much higher than $25-30 per acre or 2/3 - 1/3 crop share. One land-lady we knew in Alberta took the first 10 bushels where they grew wheat, barley and oats.

Some cash landlords take half April first-rest Sept first or some variation that suits their tax situation. I think that when you goto full cash rent, the land owner loses his status as a farmer, also may lose his capital gains exemptions. Ideas?

[sofa.king]

I can't understand paying huge rent just to have more land why not just keep buying small parcels of land that you can afford to pay for then at least when you are done farming you will own something. If you don't pay for your equipment lease you lose it why should land be any different landlords aren't any different than case or John deere.

[fjlip]

Some cash landlords take half April first-rest Sept first or some variation that suits their tax situation. I think that when you goto full cash rent, the land owner loses his status as a farmer, also may lose his capital gains exemptions. Ideas?

Half the rent was all some landlords saw, best to get all of it before seeding.

The Capital Gains Exemption requires that you or a family member farmed it, think there was a year that it changed slightly, but a neighbor renting since 1985 is still okay. And he has been getting at least 20% of gross bushels for 32 years. Tenant doing fine, rents about 3000 acres like that.

[Hamloc]

Fair rent is what the market will bear. What is not fair is the fact that land speculators got enriched through government money printing of the last decade. Stop the printing press and rate will return to the 5.5 to 6% range. 4000 per acre dirt turns into 1000 per acre dirt. Then 4000*0.03=120 and 1000*0.06=60. Yes there has been 4000 per cultivated acre land in the Edmonton region. I think there will be lots of hoarders looking for 4000 this winter but that day has passed.

I agree 100%. The run up on land prices has been caused by years of low interest policies by government. The only thing that will slow the ever increasing price of land is a return to a prudent interest rate policy. Unfortunately governments have run up so much debt that they can't afford to do that. As for what is fair rent? Unfortunately you have to pay what the market is or lose the land, that simple.

[Horse]

I see it is more complicated than I thought, or so some of you think. Wouldn't it be simple to say 20% and that way both share some of the risk. Some that are addicted to new paint are caught both ways, they need low rent to be able to run new iron, but need acres to run it on. Most landlords around here are like me ,to old to bother getting new iron but have spent a lifetime getting what they have so don't want to sell as that's admitting they can't do it anymore, making them feel useless. Here they pay by the cultivated acre so I don't get it when some say they can only seed x many acres but the rent is so much ?