Leasing my Land

[Needville]

This is definitely a good deal for you. I lease land a little south of you. I pay from $0.00 per acre to $30.00 per acre. The average is probably about the $15 you are being offered. I only pay the $30 an acre because it is next to some land I own and the convenience is worth it.

Having someone you trust is worth any price. Someone suggested $50 an acre, or a total of $2000--is the extra money enough to have to deal with someone you don't know and have no idea if you can trust?

I would consider waiving any fee in exchange for putting up a new fence (one of my places is like that), or offering to buy the materials and he build a new fence. You will get the money back when you sell it.

 

[paulsharvey]

This is definitely a good deal for you. I lease land a little south of you. I pay from $0.00 per acre to $30.00 per acre. The average is probably about the $15 you are being offered. I only pay the $30 an acre because it is next to some land I own and the convenience is worth it.

Having someone you trust is worth any price. Someone suggested $50 an acre, or a total of $2000--is the extra money enough to have to deal with someone you don't know and have no idea if you can trust?

I would consider waiving any fee in exchange for putting up a new fence (one of my places is like that), or offering to buy the materials and he build a new fence. You will get the money back when you sell it.

So, I had the thought about no money lease, but I think the money side will make it much more cut and dry for Eddie. If this is just a handshake free use by the neighbor of Eddie's property, there could be an argument that he is responsible for the actions of the cattle. The lease makes it clear that it's not his cattle...

The biggest advantage (this is based on FLa, so taxes work different state by state), is the Bona Fide agricultural property can continue at no cost to Eddie, and save him a bunch on property taxes, at no actual cost to him. The fence is a nice benefit for sure. The $700/year is not the main reason IMO to sign the lease

 

[paulsharvey]

What i was trying to say above, it reduces Eddie's holding cost of the land to basically zero, for what is an investment property. Without the lease, I'm guessing he'd pay $500/year or more in property taxes for it to sit

 

[paulsharvey]

Also, don't know what kinda game is on the property, or if there are creeks or a pond, but there is a website that allows property owners to do short leases (a couple days) for outdoor Sportsman activities. Maybe a couple weekend turkey leases (it's kinda the Airbnb of hunting/fishing/camping).

 

[paulsharvey]

Land trust, I've seen them on Vortex Nation and maybe Meat eater pod casts, and maybe another thing before. People will pay good money to have a 2 or 3 day self hunt for some turkeys (or deer, ducks, hogs, ect). They really seem to work with most ag properties that are trying to diversify revenue.

 

[paulsharvey]

I dont know if the cattle lease and Land Trust are really mutually exclusive, but i would want some sort of separation from planned hunt locations and cattle. Duck and turkey though, I would be Far less worried about a stray shot inhuring cattle.

Heck, maybe coyote and hog hunts are mutually beneficial with the cattle lease?

Edit; i don't know how much Land Trust gets from the weekend lease, but there are plenty of folks who are willing to pay $700/weekend for a decent turkey area, and it sounds like you have the advantage of power and water, for camping or an RV. It's not like some triticale food plots are going to be a bad thing after spring turkey for the cattle

 

[Complete Turf Care]

Here is my experience with leasing for cattle

About 25 years ago, a local cattleman asked to lease my mom's family land for cattle. We signed a lease for 5 years, and renewed it after the 5 years and added that it would automatically renew every year, unless either party gave 120 days notice of their intent not to renew.

The lease cost to him was $15 per acre OR, the government payments on the land, whichever was greater. This land had rice base acres, which means it had rice on it years ago, and payments were made.

Over the years, those government payments went away, and I raised the price to $25 per acre for the last 2 years. And, over the years, I ended up owning most of the land. We always felt that him keeping the land clean was worth a good bit to us. If he was not cutting hay and grazing it, it would have been taken over by trees within a couple of years.

Towards the end of last year, I gave him his 120 day notice to terminate the lease.

I contacted a sugar cane farmer who was eager to plant sugar on it. His lease offer is a bit complicated, but it amounts to about $130-140 per acre. And he will make more improvements to the land. The only issue with sugar cane, is I have to sign a 5 year lease, and if I want him off, I have to pay for his crop investment on a scale. In other words, if I want him off after he plants the crop, I will have to pay him about $5000 per acre the first year and it will be down to about $1500 per acre in the 5th year.

 

[Complete Turf Care]

I would also suggest you consider selling that property and buying something closer so that you can tend to it easier. Let the neighbor lease it for a few years, and give him first refusal when you decide to sell.
That way you can take your time to find something you like and he ends up with the property next to him. Win-Win.

 

[Sigarms]

I would consider waiving any fee in exchange for putting up a new fence (one of my places is like that), or offering to buy the materials and he build a new fence. You will get the money back when you sell it.

Big plus 1!

Having someone you trust to work on fencing and taking care of the property really is priceless. Just tell him what he'd pay you to put into the upkeep of the land.

When we bought our place, a farmer was using our land for his cows with the previous owner and we kept the agreement in place. Only issue is after 3 years, the farmer really wasn't doing anything with the land or fencing, and we finally had to ask him to get his cows off our property because we got tired of having to call him to tell him one of his cows got out of the pasture.

 

[ultrarunner]

Yep… plus activists here have cut fences to allow livestock to roam.

One morning my brother was having an early cup of coffee and looked out to see a dozen or so cows on his back 40… during the night fences were cut.

The rancher who leases the neighboring land was most apologetic and my brother said don’t worry about it… brother saddled up and helped move the cows back and the rancher repaired the fence in no time.

There is great value in having good neighbors… and more so when the property is distant.

 

[dougtrr2]

You mentioned that the ultimate goal is to sell that land and basically the land is not bringing you any enjoyment.

As you are thinking about your selling price, don't forget about your annual expenses. Taxes, maintenance etc. You will continue to pay out money every year for something you really don't want. Add that up over a few years and it might be better to take a bit lower price and move on with you life.

My brother had a business. When he got out of it they had an offer of 200,000 for the land and buildings. That wasn't enough. It was a small town, so the market was limited. After five years they finally agreed to sell it for ..... 200,000. But they had spent 20,000 a year for taxes and maintenance.

Doug in SW IA

 

[airbiscuit]

I have 40 acres that's 65 miles from where I live. ...

My goal for the land is to hold onto it until it's worth stupid money. It's an hour out of the Dallas area, and the area is still very rural, but there is a lot of building going on there. The land has city water and power to it, but it's not turned on at this time. My hope is that it will continue to increase in value, and that would only be better with somebody taking care of the land. I have no interest in going there, or messing with it, it's just an investment that's sitting there.

Another concern is in keeping it Ag with his cattle on it. My taxes are very low because of the cattle that I just sold that were on the land. Keeping it in Ag should be easier with his cows using that land.

Does this make sense? Is $15 an acre fair? I'm not very motivated to make this a big legal issue. I would really just keep it informal and let him do what he wants to the land to make it better to feed his cows. The way it is now, there really isn't any way to make the land worse, the mesquite trees or really bad there, and if he removes some of them, it's a win for me!!!! Just mowing it once or twice a year would be a huge savings for me and an improvement to the land.

I think it's the proximity to Dallas that is a factor in the hold on to it for a while approach.

 

[EddieWalker]

I think it's the proximity to Dallas that is a factor in the hold on to it for a while approach.

That's what I'm thinking. Of course, it could change at any time, so I'm not really set on one thing over another. For the right price, I could see selling this place too. My lifelong dream has always been to live in the Rocky Mountains, but prices there have gotten so out of control, I doubt it will ever happen. I'll just have to wait and see how it all turns out.

 

[paulsharvey]

This cattle lease would reduce his holding costs to near zero. Sure, the property value Could drop, but being so close to a major metro, I think holding the property, and leasing it is probably the "highest and best use". The cattle farmer isn't going to buy what can be leased for $15/year for $10,000 per acre, or even $5,000 per acre; but eventually there will likely be a developer who wants to turn it into 5 acre, semi rural subdivision, and they would likely pay $5000+/acre

 

[paulsharvey]

I still would not rule out short term hunting lease/recreational. Being so close to DFW, I'll bet there is a line of folks ready to drop $500/weekend for duck/turkey/deer/hog hunting, or even special event short term RV spot. Maybe the week of the Cotton Bowl or other major sporting events. Texas motor speedway races, ect. You can probably get $500/week, and i would guess you can have an RV setup because of the existing home. I'm NOT saying 20 RVs, that likely requires permitting, but a single RV for a week, that is probably allowed with no permitting, and only takes up the area directly at the old home/shop site.

 

[EddieWalker]

This cattle lease would reduce his holding costs to near zero. Sure, the property value Could drop, but being so close to a major metro, I think holding the property, and leasing it is probably the "highest and best use". The cattle farmer isn't going to buy what can be leased for $15/year for $10,000 per acre, or even $5,000 per acre; but eventually there will likely be a developer who wants to turn it into 5 acre, semi rural subdivision, and they would likely pay $5000+/acre

$8,000 an acre and more is the listed price for land in the area. I'm sure that the neighbor would want to pay a lot less than that, but I'm also sure that he knows what land is going for there too. My guess is that if he wants it, he knows that it's a long-term investment that will continue to increase if he buys it. But I also wonder if he is more interested in buying it to stop somebody from building more houses there.

Either way, it's not my concern. If Texas continues to grow like it has, flat, easy to build on land and hour from Dallas, on a paved, dead end road with power and city water, should only increase in value.

 

[mike69440]

$8,000 an acre and more is the listed price for land in the area. I'm sure that the neighbor would want to pay a lot less than that, but I'm also sure that he knows what land is going for there too. My guess is that if he wants it, he knows that it's a long-term investment that will continue to increase if he buys it. But I also wonder if he is more interested in buying it to stop somebody from building more houses there.

Either way, it's not my concern. If Texas continues to grow like it has, flat, easy to build on land and hour from Dallas, on a paved, dead end road with power and city water, should only increase in value.

Short term Legal binding lease, but unless yearly expense of keeping the land is too much to handle, Don't sell just yet is what my thinking is.

 

[ultrarunner]

For years my uncle turned down offers in the 800 to million for a commercial Oakland property.

Last year his health started declining and he said ok... sell.

I contacted 7 that expressed interest over the last 6 years and all politely declined at any price.

The Oakland commercial market is down 60 to 80 percent and city regulations make hold vacant property very expensive.

Will it turn... probably... but in who's lifetime?

 

[bigtiller]

Something to think about.

$8000 times 40 acres invested in the market could return in the neighborhood of $20,000 per year.

 

[EddieWalker]

I brought that up in another thread about investing under the new President. I’m wondering if land prices will shoot up because the housing will take off, or will the Market take off due to an Administration that is pro business? So far it’s just a lot of guessing. And in this case, doing nothing seems to be the best option