Pasture and timber pasture rental

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Eugene
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Pasture and timber pasture rental

Postby Eugene » Fri Jul 15, 2016 5:36 pm

I was asked again today to rent out the acreage. Told the neighbor asking to rent the acreage that I would talk to my son. Son and I have had numerous requests to rent out the property or lease for hunting. Refused every request.

Crunched the numbers again this afternoon. Calculated rents received on the approximately 30 plus fenced acres at $17- acre per year. Deducted the property tax, state and federal income tax, tax prepares fee, minor miscellaneous expenses.

Based on the value of the acreage, renting would return a profit of .0096666% per annum.

$17- per acre, per annum, is a ballpark center figure for pasture and timber pasture rental for this part of Missouri.
I have an excuse. CRS.

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John *.?-!.* cub owner
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Re: Pasture and timber pasture rental

Postby John *.?-!.* cub owner » Sat Jul 16, 2016 11:07 am

Eugene wrote:.......Crunched the numbers again this afternoon. Calculated rents received on the approximately 30 plus fenced acres at $17- acre per year. Deducted the property tax, state and federal income tax, tax prepares fee, minor miscellaneous expenses.......
How many of these expenses would you have on the property anyway, even if not rented?
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Re: Pasture and timber pasture rental

Postby Eugene » Sat Jul 16, 2016 3:13 pm

John *.?-!.* cub owner wrote:How many of these expenses would you have on the property anyway, even if not rented?
I would have the property tax at $140- a year plus some of the expense of maintaining the property. But by renting out the acreage I would loose out on black walnut harvest, fire wood, and recreation. Recreation such as family deer hunting, target shooting, tractor seat time, and use of the shop.

The acreage including buildings is worth some where north of $80K. 30 acres X $17 a year per acre = $510-.

More number crunching, $510- divided by $80k =s a return of .006375% on estimated current property value. Or .01133% per year return on my initial investment.

I don't need the $510- per year less my expenses, which could include attorney fees.

Actually, I think I have a better deal with an adjoining property owner. No out of pocket cost to range and water cattle on the acreage. Help maintain the fences and when neighbor brings over his big machinery, help maintain/improve the property. I maintain control of the property.

I also have something of extreme value to the neighbor, a year around spring flowing at approximately 50 gallons per minute. Drought a couple of years ago all the ponds in the area dried up. Only water for his cattle was the spring.

Value of pasture land fluctuates with cattle prices. Typically I see somewhere between 1% and 3% per year increase in pasture land value. Pasture land values have increased more than crop land in recent years for several reasons.
I have an excuse. CRS.

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Re: Pasture and timber pasture rental

Postby Denny Clayton » Sun Jul 17, 2016 8:19 am

Eugene wrote:
Actually, I think I have a better deal with an adjoining property owner. No out of pocket cost to range and water cattle on the acreage. Help maintain the fences and when neighbor brings over his big machinery, help maintain/improve the property. I maintain control of the property.

I also have something of extreme value to the neighbor, a year around spring flowing at approximately 50 gallons per minute. Drought a couple of years ago all the ponds in the area dried up. Only water for his cattle was the spring.

I think the above two paragraphs are worth far more than $510 a year not to mention the hunting, shooting, walnut harvesting, etc. mentioned earlier.
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Re: Pasture and timber pasture rental

Postby Stanton » Mon Jul 18, 2016 6:52 am

:Dito: to Denny's statement.
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Re: Pasture and timber pasture rental

Postby Eugene » Mon Jul 18, 2016 12:45 pm

Initially brought up this topic because somethings are worth more than rent money.

Son and I spent some time looking for a building to use as a "shop" when the acreage came up for sale. Acreage had several farm building and a hog shed suitable for a shop. The acreage was about the same price as what folks were asking for small building suitable as a shop.
I have an excuse. CRS.

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Re: Pasture and timber pasture rental

Postby ricky racer » Mon Jul 18, 2016 5:14 pm

I'm having a hard time understanding this conversation and I also don't understand the $17 per acre rent. I currently rent out my tillable acreage but not the non-tillable. I realize that rent amounts vary from area to area. My tillable acreage rents for $100 per acre for the 12 acres that are tillable. I am able to use my non-rented property any way I please and once the crops are out of the field, I can use the field as I wish too (tractor rides, target practice, etc.). I have a lane that goes through my property to the neighbors woods behind my place. I maintain the lane and help out maintaining the fence rows. The rent pays half of my property taxes which eases the pocket book a bit.
I see no reason that you can't rent the tillable acreage and still get your walnuts, firewood or go hunting when ever you want. You will just need to allow access to those areas and have a contractual agreement with the farmer renting your property allowing you access such as a lane next to a fence row for instance.

Leasing your property for hunting can be another thing. In Michigan we have a "hold harmless" law that states that if you allow someone to hunt on your property and get hurt due to an accident, the land owner can't sue the land owner (unless some purposeful attempt to cause injury is found). However, if you lease your property, now it's considered a commercial venture and the hold harmless law goes out the window. You may be required to carry additional liability insurance to cover the leasing party.
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Re: Pasture and timber pasture rental

Postby Eugene » Mon Jul 18, 2016 8:20 pm

There is 120 foot rise from the bottom to the top of the hill in 36 acres. The bottom land, approximately 4 acres is a gravel pit covered with a couple inches of soil. Top of the hill, approximately 10 acres is clay, suitable for pasture and hay, not suitable for row crops. Side hills are rock/boulder strewn, very steep, and only suitable for timber.

There are some old terraces on and near top of the hill. Apparently at some time previous owners tried to row crop the area. I did soil tests on the top of the hill. Cost of the lime and fertilizer was prohibitive.

Above description of the acreage pretty much describes most of this portion of the Ozarks. Some river and stream bottoms is suitable for row crops, but subject to flooding. Without actually seeing the property and the area, it's hard to visualize.

$17- per acre rent. There are several on line resources that list rental prices, low, average, high, for your county.

Univ of Missouri offers classes in various subjects. I have taken classes on Missouri fence law, renting ag property, and forestry.

Insurance. Also another area I/we have investigated. Insurance costs more than the return on pasture/timber land rental or hunting lease.

Edit. Prior to my agreement with the current pasture utilizer, I had use of an easement on an adjacent acreage of 13 acres. I had to open 2 gates to get to the top of the hill. The "owner" of the adjacent acreage planted trees and put large boulders in the easements to keep me and my current pasture utilizer from crossing his property. Law suit after the adjacent property owner threatened current pasture utilizer with ball bat.

Adjacent pasture utilizer was mining gravel in an adjacent stream. Asked him to use the rented high lift to cut a road to the top of the ridge. Done, that way we don't have to use the easement to cross neighbor's land.

Easement. There is an easement across the bottom of the acreage, an old abandoned county road which crosses the bottom end of my property and the 13 acre adjacent property to and across the current pasture utilizers property. The bank, mortgage holder on the adjacent 13 acres wanted $4000- to release the easement. Basically so that the "owners" of the 13 acres couldn't cross my property during high water to get to the county road. Single finger digit time. I put a gate on the easement. If the neighbors doesn't use the easement in 10 years, Missouri law, the gate gets closed off.
I have an excuse. CRS.


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