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Farmland market observation
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bsfarms
Posted 4/22/2018 16:36 (#6724956 - in reply to #6724143)
Subject: RE: Farmland market observation



south central WI
Deere6 - 4/22/2018 07:34

The only way I can see it working is if you have a "good friend" or family that is rich. Otherwise: they likely aren't going to pay top dollar for it; because right now it would be a poor investment. Second, who does 10 year leases with the price locked in? That would be rare and unwise for both parties imo. Third if a person is looking for ROI they will want AT least market value if not more for cash rent. That likely means the farmer isn't going to make much if any, still plenty of guys wanting to expand that will farm for little to nothing, so rental rates are staying inflated. The last part kind of makes me laugh; the "first chance to buy it back in 10 years if it is resold". "I will sell it to you for 12k/acre." "No that's too high". "Ok you had your chance". You will end up having to pay auction price for it and hope no one else wants it too bad. So imo this is why it only works if you can find family or friend that will cut you a deal. I still don't understand it except if a guy is in trouble it may be his best option (other options are worse).


That's not how a right of first refusal works. They get the offer first, you have a right to match it. They can't say I want 12k, you say no, then they sell it for 10k. When it sells, you have the right to match it.

Also land has almost always had people willing to overpay rent, yet people are able to rent at a fair price and still survive. Rent changes can be written in the contract, as in a certain % price swing up or down is allowable every year.
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