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SW KS, near Dodge City | See Ben, there's where we differ. To me a 400K house and a stay at home wife is a VERY high SOL. Let's say you put 25% down on that house, and finance the other 300K at 4% over 20 years. That's 22K/yr of house payments. The average family with a 400K house also is likely not going to scrimp on other living expenses, and judging by what I'm seeing at the bank, those would very likely equate to another 80K/yr. And that's after-tax spending. So, tack another 15K/yr of after tax house payments (approximately, over the life of the loan) and you're at 95K/yr of after-tax family living expenses, not including insurance. So, that's in essence making 140K/yr job and spending every penny.
For an operation that is 3 or 4 generations old, that might not be a problem, for those that don't have that put together for them, they need to realize that not every situation is the same.
Farms have 2 places that they can truly control expenses, capital purchases and labor, which in most cases includes the owner/operator's family living expenses. Most businesses can cut labor by reducing staff numbers. A lot of farms aren't in a position to do that, so reduction of salary levels are about the only savings they can achieve. But as this conversation proves it's much easier to let the belt out than bring it back in.
Yes, land rents are going to have to come down, but IMO those will be the last things to come down. Without a land base, you have no business.
EDIT: Ben, I'm not saying this and directing it at you. You have the skill set and ability and hustle to afford that. I'm saying this for those that don't have that skill set and simply think that because you do it, they should be entitled to it also, without the hustle to run the custom business, or the skill set to work on projects instead of just calling the shop.
Edited by pknoeber 1/11/2016 08:25
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Rent negotiations
