cancel
Showing results for 
Search instead for 
Did you mean: 
Highlighted
Honored Advisor

Landowner/tennant relations???

Hobbyfarmer and I had a few comments on a fertility/crop choice decision.  The subject of good or poor tennants was lightly touched on.  Often discussed on farming for the future, and should, there are special skills to be learned. What makes some have such great histories and others struggle?

Obviously some in farming are selfish jerks on both sides, and location and quality of property can figure in.

Do you enjoy your relationship with Owner or tennant, or is it just a business deal(and you keep it that way)?

Does the fact that more ground is being "managed" by middlemen, or that farmers are getting bigger affect the relationship?

 

Looks to me like There are few endeavors in farming, short of weather, that have such extremes of success/failure variance.

 

 

 

0 Kudos
7 Replies
Highlighted
Veteran Advisor

Re: Landowner/tenant relations???

I enjoy my interactions with my landlords, and treat them with respect and also include them as family in family type events. My success depends on the goodwill that exists with them and I honor this.

 

When we renew rents, I do a spreadsheet that takes their individual farm and shows what the yields have been, and what makes a rent that will return me a modest profit based on price projections. I always give them the option to switch from cash to share, and make more money by taking on more risk. Invariably, the answer is to stay with a fixed cash amount, they know that my rent checks won't bounce nor will I come back and say that I can't make it, and if they wanted more risk they would maybe rent to someone else or still be farming it themselves.

0 Kudos
Highlighted
Honored Advisor

Re: Landowner/tennant relations???

We do not deal in land rental to a large degree, and never did;however, we do rent an adjoining property here in NC, originally from its absentee owner, now from his widow. 

 

We did not actively recruit him, but my husband did meet him and his son one day, when they came out to see what the previous tenant was doing.  I can't explain exactly what that guy did...he would plant a crop, then never tend or even harvest it.  Best we could figure was he was farming the insurance in bad years, and the program payments in ordinary ones. 

 

When they saw he hadn't ever broken groudn that year, and it was fall, they expressed disgust with my husband present. I waited a couple of weeks, when the guy didn't harvest, since he hadnt' planted. and just offered to take on renting the land, if he considered that the man had quit the place.  I also informed him about the peanut buyiut money that was being paid at the time, ang gave him the FSA office number, suggested he call the lady in charge of that program.

 

He called me back, thanking me and offering me the place at a fair rent.  He didn't want us to fence adn pasture it, so we raise hay there, and accepted that we wanted  to use the acreage in our manure management plan,. so signed that agreement.  I send their rent check every fall, about the time the property tax bills are mailed for the end of year payment.  I enclose the next year's manure authorization, which our permit requires,  and a SASE for her to sign and return.  I cover all of this with a cordial  letter.  She returns a note, thanking us.  Good arrangement.  Simple. 

 

As a landlord, we rent one small farm I own in VA to a hunting club of four guys I know, mostly so they will keep away the rifraff.  The "rent" is nominal, just to make it a clearly legal arrangement for their insurance to cover me as a landowner.  They have agreed to see to it that the guy who is supposed to mow for CP-33 does it, or they will do it for me.  Good arrangement. Simple. 

 

The adjoining, larger farm is in a mining lease, which my father signed in 1989, before the land ownership accrued to me. The guy who is supposed to mow for me does their cropping for the research that is conducted there.  In return for that maintenance, he gets hay off of a few acres in a separate program on the small farm. His agreement on the larger farm  is with the mining company, which has a separate research lease with me, and the other lease (the 1989 one) with the corp my family owns, for the mining itself.  Not a very good arrangement, but the most profitable of them all.  Complicated. 

 

I see that owning land presents a large set of liabilities, and a huge set of responsibilities.  Entrusting that asset to a stranger, or even a friend, is a leap of faith of sorts.  There is the business side, and often an emotional side, to the relationship.  Family politics often intervene along the way.  Glad we are able to use the land next to us for a fair fee, but are not dependent upon it in any substantial way. 

 

All agreements are no better than the worst party to them.  I think a happy landlord/tenant situation is sort of like a good marriage...someone would be hardpressed to break it up.  Also, if you marry  for money, you earn every cent, one way or the otehr. 

0 Kudos
Highlighted
Advisor

Re: Landowner/tennant relations???

I rent to my brother, share rent.  Currently living in Japan so that makes it interesting since I want to stay involved but have to rely on what he tells me most of the time.  Try to make a visit every year to see how updates are doing, tile, terraces etc.  Also try to do a little something of an upgrade to the land every year.  Of course my brother wants it all done I once and I argue that he doesn't pay me enough for that.  At first I was a little sceptical as we are both a little stuborn and stuck in our ways but looking back I think this deal has helped our relationship.  We keep business just business and family separate.  When one of us need to talk business we make sure to set a time and place, get the business done, and then family.  Other family doesn't always understand and sometimes asks us, we just politely say it is business and leave it at that.  One day I plan to farm myself, we have talked about this, I will trade him labor for the use of the equipment, or some type of arrangement like that, I think this will work for us just fine.

Personally I think a share crop lease is the best way to go, I also think I am one of the few absentee tenants that thinks this.  IMHO.

0 Kudos
Highlighted
Honored Advisor

Re: Landowner/tennant relations???

thanks tree,

I favor the crop share format also.  I think it enhances communications while working on a few details that always seem to crop up.

But I enjoy the relationship aspect of it more than some might.

For an institutional --third party- rental cash might be a better deal.  But $$ get in the way on a cash deal.  crop sharing is profit(or loss) sharing------hopefully evenly.  What benefits you, benefits me.  

 

The really bad deals you here about usually have a cash rent in them.  

0 Kudos
Highlighted
Advisor

Re: Landowner/tennant relations???

I really do enjoy my landlord's and am still friends with 2 of my former landlords.  I guess if I had to part ways today, i'd say thank you for the years of our relationship and best of luck. 50/50 share rent is extrememly rare in good iowa soil(i don't have any anymore) and truthfully if you have a straight 50/50 lease, here, it is a FANTASTIC lease for the tenant. If I live long enough to rent mine out , it will be some form of share rent.

0 Kudos
Highlighted
Senior Advisor

Re: Landowner/tennant relations???

Put my name on your short list.  I can use the money.

0 Kudos
Highlighted
Advisor

Re: Landowner/tennant relations???

I'll require references.

0 Kudos