New Website Helps Landowners and Tenants Determine a Fair Rent
Updated: Jul 9, 2020
Today we return to my favorite topic, farmland leasing in Maryland – I’m not done harping on it yet. Earlier this month I posted about Maryland average rental rates for 2013 and 2014. I stated then that I’m frequently asked what a good cash rental rate is in a given situation. I honestly still have no idea what is a good rental rate is for you, but a new tool exists to help determine not only a good cash rent, but also crop-share rent, flex-cash rent, and base rent with bonus.
The University of Minnesota’s Center for Farm Financial Management announced the release of a tool to help producers and landlords evaluate different rental arrangements. According to the website, the new tool, FairRent, “helps farmers evaluate land rental decisions by estimating the income remaining for cash rent after all other expenses. . . Based on projected enterprise budgets for crop production, FairRent determines the breakeven rental rate at various yields and prices. The results set a realistic bidding range for cash rental negotiations. Add flexible parameters to evaluate risk and returns for both the renter and landlord under flex-rent arrangements. FairRent will help you bid for land rental tracts with confidence.”
FairRent, developed with funding from the North Central Extension Risk Management Education Center at the University of Nebraska, is available at https://fairrent.umn.edu/.
Utilize FairRent along with the tools available on ag, lease101.org. Understanding what a good rent is for you as a tenant or a landlord will put you in a better position in rent negotiations.
Remember if you are looking for other leasing materials in Maryland, check out the UME Grain Marketing’s Agricultural Leasing page (https://extension.umd.edu/grainmarketing/lease-agreements). Available there is the Agricultural Leasing in Maryland book and fillable pdf sample leases to aid in developing your own leases.