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Should I Lease My Farmland?

Farmers have had some tough times and some are having financial difficulties. One way to recoup some of your losses is by leasing part or all of your farmland. The decision to lease your land is one that requires a good deal of thought, knowledge, and evaluation. It is helpful to seek guidance from an experienced attorney to draw up and execute a lease agreement. Before you decide to lease farmland, it is best to know some of the advantages and potential disadvantages.

Factors to Consider When Leasing Farmland

You will want to take several factors into consideration before you decide to lease farmland. Think about your long-term goals for your property. If you are not utilizing all of your land, you can supplement your income by leasing out a portion of the land. Think about how the tenant will use the land. You may want to include rental of some buildings and equipment. Above all, you need to make sure that your lease will cover the taxes, insurance, and other expenses that you have to put forth to maintain the farmland. The goal of leasing farmland is to benefit financially without having to worry about the property.

What are the Pitfalls of Leasing Farmland?

Leasing farmland can be a win-win for both parties. The most significant problems occur when you have a lease that does not protect your interests. You will need to ensure that you get the correct rent for your property. There are several factors that will determine market value including location, condition, and type of use, among others. Value is different depending on whether you utilize the land for crops or for livestock. You can find out the current value of your land from the United States Department of Agriculture National Agricultural Statistics Service. You may want to include some specific terms that provide you with a portion of the profits from crops.

Tips for Creating a Farmland Lease

Like any other type of rental, a written lease is essential in creating a legal agreement. The lease should include as much detail as possible such as who maintains the property, how the property will be used, rules for using the farmland, and other information that clarifies the terms of the agreement. Choose a tenant who has experience and a proven track record for this intended use. Be sure to provide terms that define how and when you can enter the property. A skilled attorney will draft a farmland lease that will protect your rights and cover all of the many issues that could arise during the term of the tenancy. If you need to make any changes to the lease, always do so in writing so they will be legally enforceable. You do not want to end up with a tenant who does not perform or fails to pay the rent.

Leasing part or all of your farmland is the ideal option for many people. Be sure to take the steps necessary to protect yourself at the onset so you will have few problems or issues throughout the lease. To learn more about leasing farmland contact Moen Sheehan Meyer, Ltd. for an initial consultation or call us at (608) 784-8310.

Published January 22, 2021
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