OT: Land Rental for Grazing (Long)

Thanks in advance for any advice and wisdom from those who know more about this.

My MIL has about 20 acres of land in NE KS that has not been in use since my FIL's passing about 20 years ago. The fences are in disrepair and red cedars have taken over a good portion of the pasture. There are also some issues with poison ivy in one corner of the property and the rural water was turned off years ago due to a leak in the line (no water well or electricity either). Many years ago, they did have a few cows they kept on the property.

A neighbor stopped by to visit with her about grazing their sheep on her land. They have about 100 head they would like to graze during the months of June, July and August. They said something to her about grazing 1/2 acre at a time? They are willing to haul water and bring their own fence. They haven't offered a dollar amount per acre for rental because they haven't researched the issue enough to know what would be a "fair" offer. They wanted to know if she was even interested before they went any further.

My MIL has been concerned for years with the disrepair of the property. She does not live on the property and does not want to sell it. It holds some sentimental value to her as they were going to build a home out there at some point, but my FIL's passing put a halt on those plans. Much of this time, my wife and I have lived 12 hours away, and even though we only live 2 hours away right now, beyond some driveway mowing and checking in on the place from time to time, I haven't been able to help much keeping the place up (especially with a new baby last year!). We have had some trouble with scumbags breaking into the building that is on the property.

My MIL is interested in having someone around the property more often and likes the idea of renting it out. At this point, she isn't looking to "make money" out of the deal, but would really like the peace of mind knowing it is being looked after and used.

Since she and I have never really done this before (and I am not really involved in the deal except she is asking for my help), I am turning to those of you who have for advice.

We have already discussed issues such as overgrazing, and liability, but would like some advice.

-As a "landlord", what concerns should she have?
-Tax implications/complications?
-Any special concerns with sheep?
-How do we ensure the land isn't over grazed?
-As she is not really looking to make "money" on this deal right now, would it be unreasonable to trade property improvements (removal of cedar trees, fixing fence) for use of the land (she doesn't want to insult the guy)?
-In general, is it possible for this to be a scenario where the "tenant" and the "landlord" could both benefit?
-What would you expect in a deal like this as a tenant? As a landlord?

Thanks folks!

OH, and to keep it tractor related, I did get the JD 2010 she had sitting in the barn running again, but I haven't had time to get the JD B going yet.

just a suggestion

Rent to farmer for $1 per year plus cost of liability insurance for two years. During that two years he is to work to improve general
maintenance. He is to pull soil sample and send her copies. Put all this in writing. At end of two years revisit lease.

As a tenant, I would appreciate the opportunity to fix the place up in lieu of monetary
payment. However, renting on a per head per month basis will usually prevent over
grazing. Beef cattle rent is typically $5 to $15 per head per month here in MN. You
mention the 1/4 acre at a time. That could be a great plan if the tenant is practicing
intensive or rotational grazing. Takes good management, but it can be beneficial to the
pasture.

I would think if they carried insurance and some type of contract where they were clearly responsible for the custody of the animals (if they get loose) then I'd probably let them have it for a token amount of money in rent just to make it legal. Sheep will graze everything hard and probably go a long way to helping clean up the mess that's on the place now. Since they've indicated that they're only grazing 1/2 ac at a time or so that says to me that they'll be rotationally grazing with electric fence... so they're probably going to have the sheep graze down everything to dirt and then move on to the next piece. That will generally result in an improvement in a fairly short time.
The only other question I'd really ask is why they're interested.... they may be running from a worm problem and need more land base to keep the sheep to one rotation per year on the same piece of land...

Rod

I have a 6 acre pasture that I had no use for other than a good view. Heard from a neighbor that a fellow just down the road had horses and needed a new place to pasture them because the place he had been using wanted double what he had been paying. Know the guy with the horses took good care of his animals and his equipment I approached him about using my 6 acres rent free, but he would have to put up a fence. I would provide the water from my spring. I wouldn't charge him anything. He readily accepted the offer.

He put up the fence and bush hogs the land every year. His horses are only there during the summer when his pasture runs low. There are only three horses.

I get the benefit of having the pasture not turn into prickly ash, autumn olive (Russian Olive), and weeds. Also get a chance to ride a horse without the expense.

We have had this arrangement for about 10 years and both parties are well satisfied. Additionally they usually give me a gift at Christmas time.

A little over 10 years ago I rented out about 640 acres for a few years for cow calf pairs. Most pasture rent is per head or pair for the grazing season, rough May 15 to Oct. 15, and maybe prorate daily rate if any are taken out early or late (figure whole season rent rate divided per day). When I quit it was getting to be about $150 per pair for the season if I recall correctly. I haven't looked into it lately as I don't have extra land to rent out, but I heard in a roundabout way it was over $400 per pair here a while back. With land prices, baby calf prices, steer/heifer prices (I've been selling mine for about $1500 to $1600 600-700lb range), I'd think that rate sounds accurate if it hasn't gone up since I heard. Don't know about sheep, not many people have them.

Not the way to do it, but it was for a number of years and I knew the guys. No contract other than verbal, no issues at all. I did the fence, water, they brought salt and mineral and checked about weekly. Drought a few years and I asked them to take some out early, and they did. Couple times strong wind would take down a branch and on the fence, I'd take care of any that got out, etc.

Trading for work done, I'd think that would be a good deal, ...if they know what they are doing and do it right.

I didn't read through this much, but I see some agreements and info here. Whether anything relevant is here, didn't take much time to look, but might be some info at least.
http://www.agmanager.info/farmmgt/land/lease/

-As a "landlord", what concerns should she have?

-Tax implications/complications?

-Any special concerns with sheep?

-How do we ensure the land isn't over grazed?

-As she is not really looking to make "money" on this deal right now, would it be unreasonable to trade property improvements (removal of
cedar trees, fixing fence) for use of the land (she doesn't want to insult the guy)?

-In general, is it possible for this to be a scenario where the "tenant" and the "landlord" could both benefit?

===========

Liability and general upkeep of soils, fences, etc.


You will gain some rental income as farm income, but on 20 acres of run down land it likely will barely cover property taxes, so no much
concern at all. Some states have lower property taxes for land used for agriculture, so you might want to look to see if you can get lower
property taxes.


Sheep will eat grass lower and harder and rip up roots if they are overgrazed. A responsible tennent that figures they will be allowed back year
after year will manage the forage and not allow this to happen.

Sheep are harder on so e fences, or I should say can squeeze through easier, so maybe more liability on loose animals.


It is common to charge on a per animal per day cost. For example a cow you charge 45 cents a day to let it graze there. (Sheep are worth less
per day, I don't remember the conversion of Animal Units right now....) Once the grass runs out, it becomes costly for the renter to keep the
critters there, as they aren't gaining any feed, just spending money. If you charge $10 a month or $50 a year or whatever per acre, the reneter
can bring feed in and keep the critters there, not costing them any extra and so it gets overgrazed. Also just get a good renter - simple right.


You sometimes attract real characters when you trade labor for pasture..... A good solid business deal with cash will maybe attract a good
renter? You can then allow dollars off for services that get completed, but do cash up front so you get a good person as a renter? I'd be real
scared of attracting a cheapskate with lazy habits with a 'free rent for work' offer............ You are fishing the wrong end of the pond.

But it does work to let them pay off the rent with doing work, just set that up right. Full charges, then discount after.


With no fences, no water, no electricity, overgrown poor hay, you will be on the low end of the pay scale for sure! But it does sound like a plan to
keep up the property some, get back some of the property taxes.

As a renter a longer range plan, 3 years or more, would let me set up fences and water lines and rotational graze a lot easier, put more into it
because I know I will be there a time.

As a landlord, you have to realize grazing critters is an up and down occupation, in a crazy drought of flood the pastures might get ruined some
that is just Mother Nature. As well a person owning critters needs to plan in 12 to 24 month periods, you can't test the waters for a couple
months and then change your mind and throw them off the land. This is a long term deal, you will be stuck with each other for some time. There
likely are laws that allow the renter time to find new pastures if you toss them off without serious issues, as they need to plan and time out the
feeding of their stock.

Just some idle thoughts.

Paul

Let me get this straight - 20 acres of neglected pasture, cedars, poison ivy, no fence, no water, and you are worried about what to charge them?

I would love to have that deal offered to me!!!! I would charge $1.00 per month & based on tenant's care to negociate for the next year. Sheep are good stewards of pasture & will increase you land's value.
HTH
Led

I agree with Rod and LED. Sneep, when grazed rotationally will make a tremendous improvement in just two years.

Thank you for all of the ideas/thoughts/suggestions. I appreciate your time!

As a landlord, if I allow a tenant to have a dog and the dog bites someone, I get
sued. If I allow a swimming pool and someone drowns, I get sued. If I allow a tenant to
have a trampoline, someone gets hurt, yep you guessed it, I get sued.

I would check with the insurance company before you do anything. I know for a fact the
three things I've mentioned have been tried and tested in the courts. Giving a tenant
permission to have dogs, swimming pools and trampolines put the landlord at risk.

I know a man who rents land for his horses. Horse got out, car hit horse. Both tenant
and landlord got sued. It's still tied up in the court.

So you saying if you lease a car from GM and you run someone down with the car... GM is going to get sued? Don't think so..

This goes back to the renter having a written contract putting that responsibility on them and requiring them to be indemnified against it.
That's a different situation than you allowing a tenant to have a dog and not having insurance... or letting billy bob let his horse run loose on your place without a fence.

Rod

I think the best thing would be to write up a simple contract to cover your rear end with liability. Make sure it states something about the animals and any liability caused by them would be the renter's responsibility and such. Then I would just charge him $1 a month and tell him to treat it like it was his (if you know him and his place is well kept). Think of it this way, you have someone checking on your place everyday, helping with some up keep, and improving the land by grazing down the growth. As far as overgrazing, I would add a guideline in the contract about it. Maybe something as simple as the vegetation can't be grazed to a height of less than 4" and not allowed to re-graze the area until it reaches a height of 16". Or something of that nature.