Fair rent agreement.

[blackpowder]

Wish I had 5 year leases.

[shtferbrains]

Whats the obsession with holding the land unless you are living on this quarter or you have some hopeful farmer in the ranks.

A cash rent deal around here would net you 3%. Not even close to inflation.

Hasn't the inflation been more than covered by the rise in land value?

[Retired]

Whats the obsession with holding the land unless you are living on this quarter or you have some hopeful farmer in the ranks.

I mean who would you rather pay you, some farmer with a complicated share crop agreement, or any of Canadas bank stocks who havent missed a dividend payment in 100yrs.

There are covered call funds off the banks paying 8% right now. Are you realistically going to get that return from share cropping.

A cash rent deal around here would net you 3%. Not even close to inflation.

Yes I live on 1 1/4 but others could be sold but dont realy need more money ,and mabey selling piece by piece or as a whole still a question. Does anyone get an 8% ROI?? Today GIC 5.2%
Cash rent 3% would be close to average around here also ,hard to tell as farmers being tight lipped you never know if you are getting the truth.
All this discussion is good but I have more to think about than ever now.

[TOM4CWB]

Yes I live on 1 1/4 but others could be sold but dont realy need more money ,and mabey selling piece by piece or as a whole still a question. Does anyone get an 8% ROI?? Today GIC 5.2%
Cash rent 3% would be close to average around here also ,hard to tell as farmers being tight lipped you never know if you are getting the truth.
All this discussion is good but I have more to think about than ever now.

23% of gross revenue would be reasonably fair for both farmer and landlord…. We include crop and hail insurance in the gross revenue. Some landlords carry their own hail insurance… that is on them to top up if they are so inclined.

Happy Farming!
Blessings

[jazz]

If you have cash on hand, I would invest that and supplement a straight forward cash rental agreement if you are dead set on holding land which is definitely an inflation hedge.

I just feel that overly complicated rental agreements are disincentive for a farmer that already has enough variables to worry about.

I dont know anybody doing crop share around here.

[shtferbrains]

You probably have it covered but IMHO the most important financial thing going into retirement is tax planning.

Taxes can take a large part of your accumulated lifetime wealth if your not well advised.

Big cash income and no expenses for first time.

[TOM4CWB]

You probably have it covered but IMHO the most important financial thing going into retirement is tax planning.

Taxes can take a large part of your accumulated lifetime wealth if your not well advised.

Big cash income and no expenses for first time.

Expenses can be part of the payment, the Gross income becomes net income… with expenses and income totaling the payment to land owner. Fair, simple, meets the requirements. Actual numbers are very close to 1/3-2/3 with expenses the 1/3-2/3 being paid by landlord…

The 23% can be adjusted… to meet the needs of the parties.

Blessings

[oldjim]

If you have cash on hand, I would invest that and supplement a straight forward cash rental agreement if you are dead set on holding land which is definitely an inflation hedge.

I just feel that overly complicated rental agreements are disincentive for a farmer that already has enough variables to worry about.

I dont know anybody doing crop share around here.

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I know of three or four around here on crop share - 30%, renter pays expenses, owner pays the taxes, some grain storage available.

[jazz]

I see where you are going. The cash rent is just too small versus the land being actively farmed, hence the crop share. Another option is getting your renter to custom farm a couple quarters for you. Give them a straight up cash rental deal maybe with a little discount kicker for some of it and then have them farm some for you.

That sort of carves out the crop share part out from under your renters umbrella. You cover your own inputs, insurance, make your own crop decisions and they just put it in your bin at harvest. Maybe cleaner arrangement.

[TOM4CWB]

I see where you are going. The cash rent is just too small versus the land being actively farmed, hence the crop share. Another option is getting your renter to custom farm a couple quarters for you. Give them a straight up cash rental deal maybe with a little discount kicker for some of it and then have them farm some for you.

That sort of carves out the crop share part out from under your renters umbrella. You cover your own inputs, insurance, make your own crop decisions and they just put it in your bin at harvest. Maybe cleaner arrangement.

Jazz, this is what our arrangements do, custom farm, whatever expenses are negotiated… but the net payment is locked in before spring planting… 23% of gross revenue… or what ever is acceptable to both parties. This spreads the risk appropriately to both sides in a reasonable way.

Cheers