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What Questions Should I Consider Before I Lease My Farmland?

If you own farmland, you know that it can be a very good investment. When you have land that you no longer need to use due to retirement or downsizing, you may consider leasing part of it. It can be helpful to know answers to critical questions so you can get the most money for your land and get the best tenants.

What are My Long-Term Goals?

Think about what you plan to do with your farmland now and in the next five, 10, or 20 years. When you get a perspective on your own expectations you can make a better decision about whether leasing your farmland is a good fit. You may be considering leasing farmland as a short-term plan to make ends meet or as a way to supplement your income as you reach retirement.

How Much is My Farmland Worth?

You want to get a fair price for renting your farmland, but you might not know how to calculate the value. There are various factors that go into the determination of market value. Location, condition of the soil, and other things are important for the value of farmland. The United States Department of Agriculture National Agricultural Statistics Service provides up-to-date land values based on location and type of use. The value changes all the time, so include a way to adjust the lease price on an annual basis.

How can I Choose a Good Farmer for My Land?

Choosing a good farmer is like choosing any other type of tenant. You should interview a few applicants before you make a decision. Make sure you are comfortable with the person who will be renting your property. Check the farmer’s references to ensure they are a good risk. Consider the way the farmer will care for your property to keep it in good condition. Compare offers and keep in mind that there are ways to make a deal better such as including specific tasks the farmer will complete to take care of your land.

Do I Need Insurance for Leased Farmland?

The farmer leasing your land should have insurance, but it is also critical to protect yourself with liability insurance. Liability insurance can help you with any costs associated with accidents that occur on the property. Insurance will cover expenses that could come from an injury or wrongful death lawsuit. This type of insurance is generally inexpensive, and is worthwhile to give you peace of mind.

What is the Best Lease for Farmland?

Many times, farmland leases are made with a simple handshake. While these handshake agreements may work for some, it is always best to utilize a formal written lease. A lease is a contract and as such, you and the tenant must abide by the rules you set forth therein. The lease outlines expectations for both parties and offers a way to resolve any type of disputes that could arise. An experienced attorney will draw up a lease agreement based on your specific needs and issues.

To learn more about farmland leasing and for legal guidance, contact our team at Moen Sheehan Meyer Ltd. online or call us for a consultation at 608-784-8310.

Published September 25, 2020
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