How To Rent Out Farmland for Cash
You found that perfect piece of hunting ground that has the right mix of tillable ground and timber to hold and attract a herd of whitetail. Problem is, you don’t have the equipment, knowledge or time to farm the land yourself and really only know enough to produce some small food plots.
Renting out the land to a local farmer will put a little money in your pocket and some food in a deer’s belly. It’s a win-win for you and the farmer. But, like any landlord/tenant relationship, you want to get the agreement in writing. Follow the steps below to ensure you and the farmer are on the same page.
Make An Arrangement
Decide if you want to rent it out for cash or share cost/profits of the harvest. There are pros and cons to both arrangements. When farmland is rented out for cash, the farmer and owner negotiate a price-per-acre. Once you agree to the price and payment is made, the farmer has a relatively free hand in making management decisions.
When you share the crop, a landowner and farmer will split the cost and profits (typically, 1/3 of the cost and profits goes to the landowner, and 2/3 of the cost and profits goes to the tenant). Before you make a decision, take a look at this guide to determine what type of agreement is right for you.
Market The Land
There are several ways to market the land. You may already know a farmer or quickly find one at the local farm co-op by word of mouth. Or, you could take out a classified ad in the local paper, post flyers in stores and restaurants around town, or list the ad online.
Be sure to give as much details as possible. What structures on the property, if any, will the tenant be able to use? How easy is it for the farmer to access the tillable land? Can they use any onsite water sources? This is the kind of information a prospective tenant will want to know. Once you start receiving inquiries, it’s time to vet the applicants.
Meet in Person
Allow the interested farmers to come out and look at the land. This meeting will give you a sense of their personal qualities. It’s also a good time to explain what will be in the lease, discuss farming practices, how long the lease term will be and negotiate price. If the farmer says he is interested in renting after seeing the land, tell him you will be in touch with what steps need to be taken next.
Renting out tillable land is good for the deer hunting and the farmer.
It’s always a good idea to ask around about anyone who may be using your land. Farming communities are typically small and everyone knows somebody. You may also want to use a tenant screening service like mysmartmove.com. Although these services are used more in the housing market, it will give you the tenants full credit report and criminal report. If the tenant passes your criteria, draw up a lease.
Get Everything in Writing
Once a lease is signed, a landlord can’t restrict how the land is farmed unless it’s written in the lease. If you want the farmer to leave some crops standing for late-season hunting, you need to get it in writing. You also want to write what will happen if you sell the land (in some states, if the buyer sells the rented land, the new buyer must honor any existing lease). And of course, be sure to note that you have permission to access and hunt on the rented land. Here is an example of a farmland lease, but be sure to put any other terms in it that are not covered. Also, have an attorney look over the document to ensure your best interest is in mind.
Forecast Insurance and Tax Implications
Income taxes and estate taxes are affected by farm rental agreements. Speak with an accountant so you know the best way to handle theses issues. Also, talk to your insurance agent to determine what type of coverage you will need to protect you from any liability while renting out the land.
Adhere to the Lease
After the lease is signed, stick to the terms. Keep lines of communication open and be reasonable. Hopefully this goes for both parties.
Renting out farmland can help your overall deer hunting management plan as well as help cover the costs of owning land. Don’t expect to get rich, but you can expect some income to help pay for your deer hunting addiction while seeing healthier deer on your property.