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South Central Illinois | So more and more often I find myself penciling high cash rents (which we pay unwillingly) vs buying land. Using basic figures, if a guy were to purchase 100 acres at 10,000 an acre (which is cheap for here) it puts you at 1,000,000. 20% down and we have 800k to finance at 3.5% for the first year. Say we're able to put it on a 30 year term. 800k/30= 26,667. Take our interest which is 28k+26,677 and were at 54,667. 54,667/100 acres = 546.67 an acre is needed to make the payment + interest. But I am crazy for paying over 300 for cash rent? I really am just trying to wrap my head around on how some family's are buying 2-300 acres a year at these prices, hell the interest payment alone is enough to make me puke. Is it possible that people are buying and only paying the interest and very little capital reduction? I'd love to hear input on both sides, yes I know anyone can come in and bid you up at any time renting, but is it financially sound to be buying aggressively now? Maybe I'm not seeing things clearly as several hundred acres of out bottoms are drowned out but at least the little boost in the market is allowing me to send rob lobster gift cards to the landowners. | |
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What is the key?
