Renting farmland may be a great investment strategy. But like all investments, it’ll take understanding and knowledge of how to obtain the most return on an investment. The secret to making smart choices when evaluating whether you should rent farmland is understanding how to secure the best deal you can for the land you’re renting. It isn’t a choice that should be made lightly, since farmland is a great valuable asset.
Therefore, with plans being made for 2023 already, below I list five factors every landowner should know before renting farmland – and how to get ready for next year, reach out to learn more about it.
Renting farmland is common
It isn’t any secret that many farmland owners don’t really farm the land themselves. A lot of farmland owners opt to rent the land owned to someone else. Around the nation, 355M acres of farmland are rented out to farm operators. This works out to around 40 percent of farmland in the United States. The market for this rented land is a whopping $32B.
Recognize how much the land is worth
If you have not already, now is the point to check the property’s fair market value. It’ll help as you plan your 2023 lease. According to Successful Farming, establish the determined lease value based on its potential of crop production in the next growing season.
Farm management involves checking the lease details
There also are a couple of items on the lease itself property owners might need to clean up or adjust as far as language is concerned. To begin with, start planning your following steps roughly 30 – 60 days before the termination date of the lease.
Speak with your farmer
Communication between landowner and tenant farmer is essential to all successful lease arrangements. Get curious and ask questions regarding their operation. Show them that you really care. Because after all, their success will lead to your success.
Understand how the tenant plans to take care of the farm
Your farmland is among your most valuable assets. It is vital that you understand how the tenant, whether future or current, plans to make sure that it’ll stay productive in the upcoming years. Question your renter as to how they have plans on practicing correct land stewardship by taking care of the land, its water resources and additional environmental factors.
In fact, this is a critical concern for a lot of farmland owners. An Iowa State University survey in 2012 found that 93 percent of landowners mentioned “good land stewardship” as the most crucial attribute they search for in a renter.
How landlords can use Tillable.com for their benefit
Tillable’s goal includes making renting and owning farmland in America sustainable and simple for future generations. They start by assisting landowners in making smarter choices about their farmland, providing them accessibility to information, data, and options they never had before. They also make it more convenient for farmers to responsibly grow operations. As a result, farms thrive through improved productivity and more attention to the land. When farms thrive, those who own, as well as care for the land also thrive.