Leasing my Land

[ddgood]

$15/acre per year is not unreasonable if the goal is to keep the land long term, without having to do upkeep on the fences. It will pay the real estate taxes on the land, the base electric charge on the property if it is still hooked up and a liability policy on the land.

We have family property in the county west of this 40 acres. A 50 acre tract that is owned by me and my siblings is leased back to a cattle operation partnership (which we are also members) that runs cattle on an additional 250 acres owned by us and some other cousins. The lease rate is a little less that what you are offered but it covers all of those thing I listed above.

Look on the Texas Agrilife Extension website for a generic lease agreement.

There is also a great handbook on ag pastures leases:

https://agrilife.org/texasaglaw/files/2021/01/Ranchers-Agricultural-Leasing-Handbook.pdf

 

[EddieWalker]

Just to show how little I know, is that $15 per acre per year? Or per month?


I’m not a fan of dilapidated houses. They are a potential hazard, attract curious people, and could become a flop house depending on where it is. I would tear it down. A day with an excavator and a few dumpsters and it will be gone.

That's for a full year. Basically $600 a year to let his cows eat the grass on my 40 acres. He has over a thousand acres, so I'm not sure how much will use my 40, but with the fence in such bad shape, our cows have been going back and for for a few years now already.

The house is an unlivable shack that the County is taxing me for with a value of $100,000 It has no floors, just a few joists and then it's open dirt. It doesn't have any sheetrock on the studs, the windows are broken, the doors do not work, or don't exist. No ceiling, and no insulation of any kind. It's really just a shell of a house with all the brick cracking really bad.

My Loan Officer says that I cannot tear it down, or I violate something with the loan. If it falls down, my Insurance Agent tells me that I'll get the $100,000 appraised value for the house. I have pictures showing the condition of the house when the land was bought, and it hasn't changed or improved. I'm just waiting for a good storm to knock it down, but so far, Mother Nature has disappointed me.

 

[ultrarunner]

No move by the bank to force payoff?

Often lenders will want out unless the party assuming is a spouse, parent or child occupying the home.

I have no experience regarding Texas property tax and insurance.

Can you appeal the value and is insurance OK continuing the policy in condition and with no one there?

Any idea as to the year of construction?

 

[jyoutz]

That's for a full year. Basically $600 a year to let his cows eat the grass on my 40 acres. He has over a thousand acres, so I'm not sure how much will use my 40, but with the fence in such bad shape, our cows have been going back and for for a few years now already.

The house is an unlivable shack that the County is taxing me for with a value of $100,000 It has no floors, just a few joists and then it's open dirt. It doesn't have any sheetrock on the studs, the windows are broken, the doors do not work, or don't exist. No ceiling, and no insulation of any kind. It's really just a shell of a house with all the brick cracking really bad.

My Loan Officer says that I cannot tear it down, or I violate something with the loan. If it falls down, my Insurance Agent tells me that I'll get the $100,000 appraised value for the house. I have pictures showing the condition of the house when the land was bought, and it hasn't changed or improved. I'm just waiting for a good storm to knock it down, but so far, Mother Nature has disappointed me.

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I would first talk with cooperative extension and get an idea of how many animals for how many months that your land can support without resource damage. Yes proper grazing can help to maintain or even improve the land, but overgrazing isn’t beneficial and can destroy native grasses and cause erosion. Then I would make the arrangement accordingly so your land isn’t overgrazed. Letting him graze cheap is one thing; damaging your land shouldn’t be acceptable.

 

[zzvyb6]

Check to see if an Ag exemption/designation can be changed by government. Here, only the landowner can 'Request' a change in tax status (ant maybe not get it !. There are also lands that go back to Ag. If you raise bees off your back deck on a 1/2 acre postage stamp lot and sell some honey, you're a farm !

Also check with a few of your nearby ag universities, hopefully, that they have numerical data over the past 10 years of land rental by county. I found a Michigan State University publication for some NextDoor questions.

USDA Farmland Cash Rental Rates

Rental rates per county taken from USDA's National Agricultural Statistics Services

www.canr.msu.edu

I was able to cut & paste the numbers out of the .pdf to make a more 'presentable' comparison. Some folks here are opposed to a proposed huge neighborhood and studying alternatives. Its a hard question to answer.

 

[Jstpssng]

I'm surprised that your insurer will cover the building. My mother got visited by an inspector a few years ago and almost lost her policy because he stated her house was vacant... despite the fact there were plants visible through the windows, lawn is mowed regularly and she was home most of the time.

 

[ultrarunner]

Would it make any sense to retire the mortgage and then you could demo the building?

Maybe a yard light to keep electric active?

Hookup fees for utilities are no joke so keeping a presence might pencil out.

 

[RayIN]

I would first talk with cooperative extension and get an idea of how many animals for how many months that your land can support without resource damage. Yes proper grazing can help to maintain or even improve the land, but overgrazing isn’t beneficial and can destroy native grasses and cause erosion. Then I would make the arrangement accordingly so your land isn’t overgrazed. Letting him graze cheap is one thing; damaging your land shouldn’t be acceptable.

Yep, here in S. Indiana grazing land/pasture will support 1 cow on 3 acres minimum without detriment. Any more and what you describe slowly happens.
I talked with a man from N.M. and he said there it was 1 cow for 35 acres minimum.
So that is a very important point for consideration.

 

[airbiscuit]

Lots of good advice here. In my case, in WI, when I inherited the family farm, I was approached by a farmer to rent the cropland. He cleaned up the old fencing, removed some old junk, and would be a good steward of the land. He paid me $17 an acre. That was less than what the charts said I should get, but he was a straight shooter, the property would be used as it should, and I get to keep the Ag property classification. It was absolutely worth it to me.

Your neighbor sounds like he also is a straight shooter. I agree with putting the lease/rent in writing.
It should include the fencing/mowing, etc.
I would give him a three year contract, renewable annually.
You might want to include a clause that the agreement can be terminated in 30 days if the property is sold.
I like the idea of having separate hunting lease
Might you be able to rent out the shop and/or shed?

 

[jyoutz]

Yep, here in S. Indiana grazing land/pasture will support 1 cow on 3 acres minimum without detriment. Any more and what you describe slowly happens.
I talked with a man from N.M. and he said there it was 1 cow for 35 acres minimum.
So that is a very important point for consideration.

Very true. NM has a lot of different climatic zones and very different grazing ratios depending on where you are. But regardless, it’s smart to know what your land can support and not exceed that wherever your land is located.