Farmer Is The Key To Sucess

The Renter

Your farmer will have the same interests you do.  He wants you to find a good deal on land.  The less you pay for the land the less you have to charge him rent.  He has no interest in farming poor land.  He has no interest in farming frequently flooded land.  He only wants the best possible ground for you.  How can he help us do this?  He has local knowledge.  

Local Knowledge

He'll know all about the ground.  He may know of ground that is not on the market.  He may know of additional renters.  He can give us a look into the local market.  He may know of hidden traps or issues.  He knows of good land that is too isolated to farm.  And, best of all, he may know the motivations of the seller.

What Motivates the Renter

Things that motivate a farmer is what his rental rates will be?  Can the land be share cropped?  Will he have to buy more equipment?  How long will the lease be?  Things to to think about when drawing up a lease would be can the land be improved and will that lease allow the farmer enough time to make the improvements?  

What could need improving?  I may not have been in production for awhile so the farmer may have to clean it up and til it.  Are there fences to move?  Will it need to be terraced to improve water flow?  Is it a long distance from his operation?  How much can the land be improved over time?

How To Use The Farmer In Negotiations

Let's say you have identified a farmer you want to rent to before you have made an offer on a piece of land.  What he can do for you is give you local knowledge.  He can help you identify property that isn't on the market.  He may know the sellers motivations.  And he can keep the sale local and private if so wished.  Usually the rent agreement is already made before negotiating the sales price.  And the farmer would have already done all the due diligence before hand.

Now what if you put in an offer before you find a farmer?  You can make an offer contingent upon you finding a farmer.  This would motivate the seller and agent to help you find a good farmer.  If you don't find a farmer then the sale is null and void.  Let's say you find some farmers but all their rent bids are low.  You can renegotiate the price based on this.  Also, if you talk to farmers and they say the land is bad you can then cancel the sale and move on.