Question on this cash rent you guys talk about???

JOCCO · Nov 9, 2014

Can any of you exsplain this cash rent??? For me I have done a percentage of a crop (i.e. 10cents a pound, Hay 50/50 etc.) I have also paid a fee like $500 to use the place/land for say 1 year. Thanks for the clarification.

Mike (WA) · Nov 9, 2014

I'll rent to you (ie, let you grow a crop on) my 100 acres, for $250 per acre per year. So you give me $25,000 and use the land like it was your own. I don't pay for any inputs, you keep 100% of the crop.

JOCCO · Nov 9, 2014

OK Mike thanks same thing (only I used a check not cash)!!!!! Many land owners don't want the "sharecrop" route like buying the seed etc.

SweetFeet · Nov 9, 2014

We rent out our land for straight cash-rent (Edit: as Mike WA says below... we don't pay any expenses, we don't get a share of the crop).

Renter pays rent in full on May 1 each year.

Rent here is southern MN is crazy high. We don't charge as much as a lot of folks do... we absolutely love our renter - he takes great care of our land. This in NOT in our contract - BUT if he has a really good year, he brings us a bonus check (have gotten a nice bonus the last several years and last year it was a really nice check).

I don't state our rental rate just in case someone on this forum knows us or recognizes our place... renter would prefer we not share the specific dollar amount (and we honor that).

JOCCO · Nov 9, 2014

Totally understand on sharing specifics!!! Seems different areas have different terms/names.

sourgum · Nov 9, 2014

Cash rent is common around us. We get one half rent in spring and the other half after crop harvest. Our rent agreements are in a written contract. Would never rent in today's world without written agreement. Actually expected a rent reduction for next year. We can view a rent survey online published by the university each year. Many farmers hate it but it gives us an idea if we are getting the average rent for the area or whatever.(If you believe the survey numbers). Like Sweetfeet we don't reveal our numbers.

Tony in SD · Nov 9, 2014

Once upon a time I split the rent 1/2 in spring 1/2 in fall. Had to go to court to get the fall half. Solved that problem by getting a new renter, under written contract, that pays 100% up front the begining of January. If for some reason the renter is unwilling or can't pay in January, the contract allows me to terminate the contract and seek other renters. He keeps 100% of all income including government payments.

Goose · Nov 9, 2014

When I still rented out land, last price was $240 per acre.

The contract stated rent was due in advance for the upcoming year on or prior to January 10. From that point on, the renter could farm it however he wanted.

Nebraska Cowman · Nov 9, 2014

In every farming community I have lived in a check has always been "cash". If I tell you I'm paying cash it probably means I'm writing a check for the full amount.

JOCCO · Nov 9, 2014

Not here cowman: Cash is green and checks are paper thoughts. Cash (green) usally carries more weight!!!!

Mike (WA) · Nov 9, 2014

Guess if I had a renter I didn't trust enough to take a check, I'd be looking for a new renter. There's plenty of time to get the check collected if it bounces, and he ain't goin' anywhere. Not like the Walmart customer going out the door with a big screen, never to be seen again.

When I used to do bankruptcies for clients, I always took personal checks. Some thought I was nuts, but I never filed it until check cleared, and these folks didn't want anything messing up their filing. Only had 2 bouncers in 15 years, and they were both in with cash to cover it within the day. With the competition for land to rent, I'd think tenants would have the same mindset with their land rent payments.

504 · Nov 9, 2014

Cash rent in January,with a 1099 in December.

Frank 41 · Nov 9, 2014

Usually the more greed in the owner, the quicker the renter will mine the farm is what I have seen in my area.

Iowa Jim · Nov 9, 2014

Dropping off $25,000 in Benjamins or Hamiltons makes no sense.

IH2444 · Nov 9, 2014

(quoted from post at 21:16:27 11/09/14)
Dropping off $25,000 in Benjamins or Hamiltons makes no sense.

t does if the one getting in wishes to avoid paying taxes on it.

Mike (WA) · Nov 9, 2014

Rule of thumb for cash transactions- if the payor is not going to report the transaction, you're pretty safe not reporting it, either. But nobody is going to pay 25 grand in land rent without reporting it, and IRS is pretty strict about doing 1099's for anything over $600.00. I wouldn't chance doing it "off the books".

MarkB_MI · Nov 10, 2014

In general, land owners prefer cash rent because it gives a guaranteed income, and they know when it's going to be paid. So cash rent is in theory lower than share rent, but of course with shares there's always a risk the crop will be wiped out. My renters pay half in April and the remainder in December.

redforlife · Nov 10, 2014

Cash rent pretty much means you as a landowner gets a set amount of money, and the tenant can do as they want on your land during the given amount of time and keep all income. There might be some fine line rules and regulations between various owners and tenants, but that is pretty much the jist of it.

Question on this cash rent you guys talk about???

JOCCO

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Mike (WA)

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JOCCO

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SweetFeet

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JOCCO

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sourgum

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Tony in SD

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Goose

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Nebraska Cowman

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JOCCO

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Mike (WA)

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504

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Frank 41

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Iowa Jim

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IH2444

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Mike (WA)

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MarkB_MI

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redforlife

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