| flyboytoo - 1/1/2025 14:31
What percent of land value should a landlord get? 160 acres X $15,000 = $2,400,000. As an investment, %5 should be common. Plus he has higher RE taxes the last few yrs. %3.5 is $525 per acre.
$525per acre, your kidding right..........so 60 bushel soybeans at $10 a bushel is $600 gross. 70 bushel is $700 and 50 bushel is $500. Expenses are $70 for seed and $50 for chemicals. So $120 an acre with no insecticide or fungicide. Half of $600-$120 is $480 so in that scenario, fair rent is $240 an acre. Some might pay $270 and hope for 70 bushel soybeans and some might pay $225 knowing that it's likely a 50 bushel yield. Who knows. That's where the farmer takes the risk. The landlords risk is getting in an accident on the way to the bank. I will also add that the landlord has no tenant risk if the money is up front in march, no utility risk, minimal insurance premiums, no vaccancy risk ECT compared to commercial property or housing property. That's why you don't apply the same principles to ag land and why I giggle at the "landlord risk" line. Its the easiest investment to make if you can afford it. Period.
Edited by doathlon 1/1/2025 15:16
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The cash rent auction mcbees
