Renting farm land

Discussion in 'Homesteading Questions' started by Oshbrg, Apr 28, 2005.

  1. Oshbrg

    Oshbrg Member

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    Wisconsin
    Earlier this year I purchased 35 acres of farm land. I have a house that is being built on it as we speak. I'm not going to get a chance to do anything with the land this year, but to my supprise, the neighbor stopped by and asked if he might be able to rent it out this year. I figure.... why not, it would help out with the costs of the new house. I have found that land rents for about $50 an acre, and he will be renting about 15 or so acres. Since it is such a small amout.. I don't see a reason to get an lawyer involved, but still want to make sure we have something on paper. My question is... Does anyone else rent farm land, and if so, what are the particulars that I should include in the agreement.


    Thanks much
    Mike
     
  2. NWSneaky

    NWSneaky Well-Known Member

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    Call your University Extension. They will have a fill-in-the-blanks standard form.
     

  3. NWSneaky

    NWSneaky Well-Known Member

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    BTW --- you'll want to know what the land will be used for, fence responsibility, if livestock - date brought in and taken out. All of these points will be within the standard form. Consider also liability insurance; does he have it?
     
  4. travlnusa

    travlnusa Well-Known Member

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    I rent out 30 acres each year.

    Each fall we discuss if he wants to rent the next year and agree on an amount.

    I collect 1/2 when he puts his crop in (or first hay cutting) and balance when crops come out (or last hay cutting).

    This is a handshake agreement.
     
  5. agmantoo

    agmantoo agmantoo Supporter

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    I lease/rent a large farm and I pay in advance. The landowner likes that as he has had problems collecting from others in past years. In NC, if you till the soil in Jan. you are guaranteed to having the right to harvest the crop even if it runs into Dec. Leasing or renting can tie up the use of the property therefore determine when you will be wanting it back. Have a PH and a fertility test run and make it the responsibility to get the land back in equal to or better condition than it was initially. Land typically rents for approximately the CRP payment in my area.
    PS....determine who retains the hunting rights!
     
  6. antiquestuff

    antiquestuff Well-Known Member

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    If you don't want any chemicals used, better make sure that's agreed on too--if you plan to grow without chemicals, and the soil gets chemicals put in it, may be hard to get them out.LOL
     
  7. rambler

    rambler Well-Known Member Supporter

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    I'm going to mention a few things that will open your eyes, but I do not mean to scare you. Most farm land ends up being rented on a handshake, and all is well..... :)

    Many states have different regulations, for example in many midwestern states if you have _not_ terminated the lease _in writing_ with your renter by September 1st, he has the right to rent it again next year - even if you sell the land, etc.

    Most farmers till & fertilize the ground in fall, and should you try to end the lease after such time, he can request you re-emburse him for those costs at least.

    The extension office, many banks, libraries, or even a search on the internet should provide a simple, basic ag land lease for both of you to sign & date in a couple of places, if your renter is in the farm program he will _need_ that document anyhow. There are getting to be very many regulations on farming, and your renter may require some paperwork from you - even if your land is not enrolled in the program, if anything he farms is, acres, crops planted, and yield will need to be accounted for - he will take care of that, but will need your signature on a paper or 2.

    Liability is a good thing to talk over, you really should have some on your property of course, and if it is ag land you would/should be covered for renting out the land, mention it to your insurance agent - all should be well, but mention it.

    Sounds like you have the rent part worked over, common ways is to split the crop 40% for you, 60% for him - this would make you a 'farmer' because you are at risk for crop failure, marketing, weather, etc. This can give you some benifits on taxes, property, sales, & income taxes in some states.

    Or, straight cash rent, all up front before planting, split 50% paid in spring, 50% in late fall, or a monthly payment every month. You can get paid in full at the end of the year, but this is risky to you - some folks don't/ can't pay, the other options are better - me I think the 50% now 50% after harvest is fairest to both sides even if the rent is $5 an acre less this way.... Many farmers prefer a 2-3 year lease, so they can properly address fertilizer needs. Especially if your region needs lime, one needs to apply lime & it will help your soil for 3-5 years, it's not fair to have him apply this & then you take it back after one year.....

    I would see no need for a lawyer at all. I would look for the lease boilerplate from the Extension office, and give your insurance agent a call & make sure you are covered - which you should be. Be aware that if your relationship goes bad with the renter, you will need to properly, legally end the lease by your state deadline, and at the least some fall field work you might need to pay for if you don't end the agreement in time even if you are on friendly terms. If things go bad, there can be 'issues' with havesting cornstalks after the grain crop is out, and who has hunting rights, he could 'use up' the fertlizer on your land & leave it depleated, and so on, but those things come up only if things go badly, and on 15 acres I can't see it getting there or really be worth worrying about much of that. :)

    Should work out fine for you with that basic knowledge.

    --->Paul
     
  8. mtman

    mtman Well-Known Member

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    you have to make shure when there is machinery involved there could be a spill of somesort make shure you have a claus that states the renter is responsible for the removal of contaminated soil
     
  9. Kris in MI

    Kris in MI Well-Known Member Supporter

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    We rent out our field to a local farmer who was renting it before we bought it. We have a yearly lease with him for a designated amount per acre and a certain number of acres for growing grain crops. Since we are slowly using more of the land (first it was building the house, then a yard and garden, now a barn and pastures) the amount available for rent changes each year.

    It has worked out well for us both. We have a very simple lease form drawn up on the computer that allows us to input the land amount and rent dollar figure each year. Rent is due before the end of December (after farmer has had time to get his crops off and to market; some years the soybeans don't come off until about Nov if weather is wet in early fall). The rent money helps us with our property taxes and keeps the field from growing up in weeds until we have a need for that part of our land.
     
  10. Snakeoil

    Snakeoil Well-Known Member

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    Iowa
    I rent out my land every year with no renewal discussion. We have a handshake agreement on the price per acre. He is very respectful of my land such as pruning trees for me and last fall I shot a huge nine point buck and he came over and drug it out for me. I get my check a week before Christmas every year, so that makes it nice. He alternates corn and soy beans yearly.
     
  11. Michael W. Smith

    Michael W. Smith Well-Known Member

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    We rent out our farmland. Now we are dealing with a farmer that goes to our church, so this may/may not apply to you.

    The farmer rents about 50 acres of land which is usually either corn or soybeans, and some hay. We get $275.00 / year which is paid in the fall. We have no written agreement at all (farmer had mentioned about setting one up, but never did). I do usually get about 50 hay bales per year for free. The farmer does brush hog all unused fields once per year.

    Now, this farmer does use chemicals (he no tills) so that means the fields are sprayed with weed killer before planting. Manure and other fertilizer is applied as well. I'm not real keen on the pesticide, but this deal works for us.

    I've heard people say, that even if the farmer doesn't pay you rent, as long as he brush hogs the property for you, it's worth it, because if the farmer doesn't do it, and you don't do it, it doesn't take long for brush to start to grow up.