Leased Land Operation?

[MillIron]

Hello to everyone, it's been awhile since I've posted. So long that I forgot my registration information, and had to re-register.

I came into this forum originally concerning land prices and trying to get started full time. At that time I was beginning to suffer from dispair that I'd never be able to afford a place. I'm no closer now than I was then, and this past years drought conditions didn't help my cattle raising efforts anyway.

Anyhow, here's my question. Sorry if its irritating to folks, I hope it won't be.

When I posted on the land prices I was 42, now I'm 43. I'm not getting any younger, and at the pace I'm going, if I keep my present course, I'll never be doing this full time. What I'm inclined to try to do is to simply give up on purchasing anything, and lease as much ground as I can. I'd probably have to get a monster loan to buy enough cattle to stock it, but that'd be jump start in. It might be a jump start right to failure. But, after repeatedly harassing my wife about it, she says she'll resign herself to it if I can show how this will work out in black and white.

Otherwise, I fear, I'm going to be stuck in my "good" town job forever, which is so helpfully taking my out of town for the next two weeks, meaning I have to lean on everyone on the cow end of this. Everyone cheerfully does that, given my good "town" job, but I feel like I'm getting walled up in town and I'll never get back out.

Anyhow, is this idea insane or can it work?

 

[Running Arrow Bill]

Not quite sure what your specific question(s) is/are...anyhoo...

If you are dedicated to get into cattle as a part-time and/or future full-time operation, and assuming your "town" job is secure and you won't get downsized, terminated, etc., then land prices will not be any cheaper in the future. As long as humans continue to breed and make more people (and land is not reproducing itself), there will be more people for less land as time goes on...supply/demand issue.

Consider buying small tract of land (outside the control of a town, city restrictions) for now...probably 20-25% down needed.

Leasing pasture for a part-time ? venture is a possibility; however, there are fencing, handling facilities issues, etc. And, would the lease be in YOUR favor rather than the lessors?

Cattle are at a low price now due to drought. Can you afford to buy some (for cash) and maintain them with pasture, hay, minerals, etc., until they get heavier and prices go up?

Personally I would never lease any land/pasture...like renting a house...you gain no equity and have nothing in the end.

You can "put a pencil" to your planned operation to see how the numbers work...then, discount any expected net income by X percent for a case of reality. ;-)

 

[Running Arrow Bill]

Another "Bill's Thought"...lol.

You're 43 now. In 10 years you'll be 53. If you don't buy any land in 10 years you'll be 53. If you do buy land in 10 years you'll be 53..."how come the same"??

Also...please excuse this...it sounds to me like you are experiencing some "burn out" in your town job...and thinking about a lifestyle change...whatever your issues are, as the Carpenter says: "Measure Twice and Cut Once."[/u]

 

[Howdyjabo]

Useing leased land is the best way to make money-
But there are big drawbacks that can knock the legs right out from under you.
The big one is looseing the lease-- lock it in long term if you can with big penalties for early release.Most landlords won't do it

We have lost money by putting in fertilizer ,lime, fencing, water, ect then loosing the lease before it paid out. Then on top of that you have to find somewhere to take your cattle or sell them.
If you can't get a long lease- try to get paid back for improovements if they terminate the lease before you got the use out of improovements.

Secondary is landlords that are just a royal pain in the ###
They can be really unrealistic .
Had one that wanted her pasture to look like a golf course- and wanted us to keep the cattle from making noise.

Plus we had pastures rented all over the place which kept us on the road alot and made jobs that required equipment more difficult.

 

[oakcreekfarms]

Around here it easier to find land to buy then leased land. Leased land is almost impossible, trust me

 

[MillIron]

Another "Bill's Thought"...lol.

You're 43 now. In 10 years you'll be 53. If you don't buy any land in 10 years you'll be 53. If you do buy land in 10 years you'll be 53..."how come the same"??

Also...please excuse this...it sounds to me like you are experiencing some "burn out" in your town job...and thinking about a lifestyle change...whatever your issues are, as the Carpenter says: "Measure Twice and Cut Once."[/u]

Thanks Bill!

 

[MillIron]

Karen and Cowhand, thanks!

 

[Howdyjabo]

Lack of equity was mentioned- and its true
But when building up and experimenting renting is easy to get out of at a moments notice without taking a huge loss(odds are someone is out there to take over your lease).
It also gives you time to get your feet wet and build up- so when the perfect buy comes along you are ready to jump into paying for it.

Plus in some areas renting makes more sense than buying. Around here with land going for $5000 + /acre I would definetly start with renting if I could.

Keep in mind that by renting you are doing the landlord a favor too-- they get to maintain their farm tax status without any effort. Thats worth ALOT. Also they don't have to do much upkeep maintaining the farms value.
Problem is if there is lots of competition(like around here) - the landlords can be pretty unrealistic ,self centered and still have people lined up wanting to rent.

 

[Central Fl Cracker]

In Fl. it is cheaper to lease land than buying it. You can still lease land her for $20 per ac. If you bought it it could cost between $ 10,000or $30,000 per ac. It has gone crazy as far as price.

 

[backhoeboogie]

There are folks who want cows on their property just to keep the ag exemption. They'll lease reasonable if you are a good person and they want you there.

 

[TheBullLady]

Extremely hard to find anything worth leasing here in central Texas as well. And as mentioned previously, unless you can get a long term lease, you'll be sweating the renewal every year. If you pour money into cattle and are forced to sell in a less than good market, you'll really be in bad shape.

I would suggest starting with as much as you can afford. If land in WY is anything like land in TX, it's not getting any cheaper.

 

[Stocker Steve]

What I'm inclined to try to do is to simply give up on purchasing anything, and lease as much ground as I can. I'd probably have to get a monster loan to buy enough cattle to stock it, but that'd be jump start in. It might be a jump start right to failure. But, after repeatedly harassing my wife about it, she says she'll resign herself to it if I can show how this will work out in black and white. Anyhow, is this idea insane or can it work?

1) I rented my first place. The owner was willing to rent for $15/acre but absolutely refused to sign a mulityear lease. I took the chance...
2) I bought my second place and I kept renting the first. The cash flow from rental property and 3 years of schedule F allowed me to swing the loan. My wife refuses to work in town so we will increase numbers and she gets to hold tails.
3) I am looking for my third place. If you are a little flexible on location there are still some "deals" out there. You can buy good grazing land for $850 to $1425 per acre in this area as long as no hunters want it.

Buying both land and cattle to start is too risky for me, but you can still make some big strides forward in 10 years. I think we can improve a property, and then add a new property project, about every three to four years.

 

[MillIron]

What I'm inclined to try to do is to simply give up on purchasing anything, and lease as much ground as I can. I'd probably have to get a monster loan to buy enough cattle to stock it, but that'd be jump start in. It might be a jump start right to failure. But, after repeatedly harassing my wife about it, she says she'll resign herself to it if I can show how this will work out in black and white. Anyhow, is this idea insane or can it work?

1) I rented my first place. The owner was willing to rent for $15/acre but absolutely refused to sign a mulityear lease. I took the chance...
2) I bought my second place and I kept renting the first. The cash flow from rental property and 3 years of schedule F allowed me to swing the loan. My wife refuses to work in town so we will increase numbers and she gets to hold tails.
3) I am looking for my third place. If you are a little flexible on location there are still some "deals" out there. You can buy good grazing land for $850 to $1425 per acre in this area as long as no hunters want it.

Buying both land and cattle to start is too risky for me, but you can still make some big strides forward in 10 years. I think we can improve a property, and then add a new property project, about every three to four years.

Stocker, are you and your wife both employed then, on your place, full time (no town jobs)?

 

[MillIron]

I suppose as part of this I should ask if anyone is aware of any really good sources of alternative funding for land or cattle purchases. Agreeing to conservation easements, etc., as part of a purchase plan?