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NWMO | The correct way to do them is figure your top cash rent price (say $300 for example) and deduct 10%-20% and use that for the base rent price
So,
$300 x .9 = $270
$300 x .8 = $240
So I’d say set a base price of $250/ac and then the bonus would be 30% on corn and 33% on soybeans.
Thats how many of them work around here. There’s quite a few of them here
You can’t give top dollar rent and bonus also, otherwise it doesn’t make sense. The idea is that you keep the rent lower to help the tenant out with working capital through the year, if you have to pay $350/ac + bonus then what’s the point? It’s a 2 way street, the bonus leaves the top end open for your landlord to make more on good yields and prices while the lower base rent helps you as the tenant to keep the upfront expense of cash rent down to help finance the year | |
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Cash rent plus bonus questions
