How much to lease land?

[California]

Just a comment - I looked up recent changes to Prop 13 tax rules then revised my post #19, above.

 

[Mtsoxfan]

For those that are leasing out, especially smaller parcels, are you using a lawyer to draw up lease, or is it something that can be done without? I'll be considering leasing 10-15 acres for haying, as it is being done on fields on my road and surrounding areas. It's been hayed before. Looking for tax break and help pay taxes. Suggestions?

 

[tradosaurus]

I'm renting 40 acres of semi open pasture with three ponds, and a very old fence on it for $15 an acre. I get a check for $600 every year, and he mows it, fixes the fence, cleans up fallen branches, and takes care of the place for me.

The land is 62 miles from where I live, and now I only go there a few times a year. It's a huge relief not "HAVING" to go there all the time to maintain it or work on it.

He also runs cattle on the land, so I get the Ag Exemption on my property taxes, which is a really big deal.

My goal for the land is to let it increase in value until I retire, and then hopefully, sell it for a good profit. Until then, having somebody else take care of it is the best option for the land.

That seems like a low price / acre. What is the going rate in East Texas?

 

[5030]

Folks, I have 15 acres of land, rolling pasture with a 3/4 pond on it. It's in central NC. Does anyone lease their land out? I have a gentleman that points about 10 cows on it and also collects about 20 of the big bales of hay from it. By mowing, he does keep it maintained for me which I always considered a wash. Does anyone know what lease rates are about for land like that? I, more or less, recover the property taxes on this one... Thanks all!

Around here, the going rate for fallow cropland is abywhere from 125 and acre to 175 an acre depending on what will be planted and the location.

 

[ultrarunner]

Just a comment - I looked up recent changes to Prop 13 tax rules then revised my post #20, above.

I believe there is also an AG exception that can be a factor in value when inheriting.

They key seems to be whomever inherits has to make it the primary home…

There are work arounds such as having an entity own it or even the person inheriting has a 1% ownership interest and continues to reside as primary as that person is already a owner.

Unfortunately, I know too many where reassessment forced sales…

Property in family for generations sold because the burden too high to inherit and keep… renters also forced out due to new owner reassessment.

If it was not for Prop 13 I would not be here in California and I pay the highest tax by far in my neighborhood… over 20k for 3 bedroom single family.

The saving grace of Prop 13 is annual inflation factor increase limited to 2% and voters must approve new assessments… not that means much as I have 27 special parcel taxes as the voters of Oakland are very generous approving new taxes… big money to fund the sports complex that is now empty with no baseball, football or basketball or youth midnight basketball, etc…

Taxes may make leasing or renting out the property not viable…

 

[California]

For those that are leasing out, especially smaller parcels, are you using a lawyer to draw up lease, or is it something that can be done without? I'll be considering leasing 10-15 acres for haying, as it is being done on fields on my road and surrounding areas. It's been hayed before. Looking for tax break and help pay taxes. Suggestions?

As for using a lawyer - no need IF you can write an agreement that is so simple and clear that you are sure a judge would interpret it as you intended.

Be sure to include liability, who stands responsible worst case.

And, consider you might need to pay an attorney some day, to present that contract to a judge to rule on some issue covered by the contract.

Also, write that this contract isn't perpetual but rather, expires after the harvest is complete, or the end of the calendar year, as appropriate to the circumstances. Next year continue it for another year.

All this will give an attorney everything needed to protect your interests
if that ever becomes necessary.

Many simple contracts are sufficient without an attorney.

The important thing is each party benefits fairly. There should be no need for either to go find an attorney.

 

[dstig1]

Any way to partner with a farmer who runs a stand at a Farmer's Market to sell apples that way? Avoids the public on your land but still lets the apples not go to waste or have to be pulled out.