Leasing farmland in 2013

farmer1990

Hi everyone, I have recently received land from a deceased uncle and at the moment I'm studying in college so I've no other choice but to lease it.

Now I'm located in North Cork at the moment with 83 acres and I was just wonder how much should I be asking for P.A.??, How long i should set the lease for?? and if it's worth it for me too lease maps out, as with the changes to the SP in 2014-2015 being unknown to the public could i end up losing alot more money in the future??
If i have other options to make money from this land besides selling or leasing it, i would also be very interested in hearing about it.

Thanks in advance for any advice ye can give me.

Manoffeeling

Well firstly, the best of luck with your inheritance and hope it brings you good health and happiness. It's a nice size farm.

Secondly, are you interested in farming as a career whether full or part time?

Thirdly, I see you are in college and also assume that you are 23 years of age. If you want to farm, that's grand, but finish college first and if you can afford to travel, then do so.

For hassle free and simplicity, lease it for a few years. If you envisage yourself farming down the road, organise maps for your own SFP and set meadows or fields for crops but you keep maps. That's what I'm at at the moment.

I don't know enough about your situation to offer sound advice but whatever you do, don't be pushed into something you don't want to do.

Sam Kade

Did you get agricultural relief? If you did you cannot sell it for 6 years or else you will be hit with a tax bill.

farmer1990

I did get agricultural relief but I'm not looking to sell only to lease the land and I was just wonder what figures I could expect to ask for without maps, as I've had allot of offers all over the place with different prices all bellow €90...I'm just wonder are these farmers just looking to take advantage of a first time leaser..

Tipp Man

What quality of land are you talking about?
What are the neighbouring farmers, tillage, cattle, cows?

You could do 11 month renting for a few years to suss out the market

My only advice - you'll never go broke renting it out, you got it for nothing so you any money you make from renting is pure profit- if it needs to be set up as a farm (livestock) then your costs could be huge and your profit won't be any higher, probably even with SFP

As I said on another thread when the SFP goes area based it will simply mean that the cost of rental land will go up and up

1chippy

If your studying at college i would just lease it. Enjoy yourself and you wont resent the land in years to come.
Dont get too tied up in the grants and quota, travel if its in you first when you finish college and decide from there.

JohnBoy

check with your accountant/solicitor, I dont think you can rent it for 6-7 years either if you claimed agricultural relief

PatQfarmer

farmer1990 wrote: »

I did get agricultural relief but I'm not looking to sell only to lease the land and I was just wonder what figures I could expect to ask for without maps, as I've had allot of offers all over the place with different prices all bellow €90...I'm just wonder are these farmers just looking to take advantage of a first time leaser..

Ask a good local auctioneer to deal with it for you. Some locals may try to "get it cheaply" off you and use the "shur your uncle and me always dealt with each other" line. An auctioneer will take the pressure away from you and be a 3rd party to sort any fights that arise...and they invariably do:rolleyes:

bob charles

PatQfarmer wrote: »

Ask a good local auctioneer to deal with it for you. Some locals may try to "get it cheaply" off you and use the "shur your uncle and me always dealt with each other" line. An auctioneer will take the pressure away from you and be a 3rd party to sort any fights that arise...and they invariably do:rolleyes:

and take there few quid for doing F all, and then not take any responsibility if the lease doesnt pay up.

PatQfarmer

bob charles wrote: »

and take there few quid for doing F all, and then not take any responsibility if the lease doesnt pay up.

Ah bob, I said "a GOOD local auctioneer", not some shyster;)

bob charles

PatQfarmer wrote: »

Ah bob, I said "a GOOD local auctioneer", not some shyster;)

yes even happens with good local auctioneers. Can think of one big crowd operating the the farming business who will treat you like I outlined, are probably touching your area where they operate.

If I give my land for leasing to a auctioneer, surely the burden should pass to him so that I am paid in full. Is it not the auctioneers job to ensure they set the ground to a reputable client in the first place? for the fees charged surely this should be the way things happen to protect the owner of the lands been leased.

delaval

bob charles wrote: »

and take there few quid for doing F all, and then not take any responsibility if the lease doesnt pay up.

Dead right do not care once fees are paid (upfront at that)
Be very careful of agents!!!!!!!!
The tennant is more important than the price.

PatQfarmer

bob charles wrote: »

yes even happens with good local auctioneers. Can think of one big crowd operating the the farming business who will treat you like I outlined, are probably touching your area where they operate.

If I give my land for leasing to a auctioneer, surely the burden should pass to him so that I am paid in full. Is it not the auctioneers job to ensure they set the ground to a reputable client in the first place? for the fees charged surely this should be the way things happen to protect the owner of the lands been leased.

Agree re reputable client and in most cases auctioneers will demand both cheques(2 halves usually) before tenant moves in. Auctioneer cannot be responsible if chq bounces, but should (and we do) make every effort to collect monies due.
To date, dealing with a large land bank for many years, the number of unpaid lettings is minimal. As stated, the quality of tenant is paramount. I agree with de laval that price is secondary to that. Easier on all parties.

mf240

PatQfarmer wrote: »

Ask a good local auctioneer to deal with it for you. Some locals may try to "get it cheaply" off you and use the "shur your uncle and me always dealt with each other" line. An auctioneer will take the pressure away from you and be a 3rd party to sort any fights that arise...and they invariably do:rolleyes:

ya ya and take a nice little cut aswell! If a client wont pay the auctioneer wont get it out of them any easier than the landowner
Unlike a mart where you will get your money even if the buyer doesent pay.

Edited to say not aimed at pat personally.

PatQfarmer

mf240 wrote: »

ya ya and take a nice little cut aswell! If a client wont pay the auctioneer wont get it out of them any easier than the landowner
Unlike a mart where you will get your money even if the buyer doesent pay.

Edited to say not aimed at pat personally.

Not taken personally;) But I've seen where pressure is applied by neighbours to get land cheaply from some owners. Auctioneers job is to get the best price that can be paid(!). Common-sense must prevail. Often times I would have advised owner to take less from solid payer than he may be bid from others. More than just the price of land in it. Some neighbours are great to look after older farm-owners, that's often a consideration. Some have a long-standing family relationship, that's often a consideration too!
My point is that a GOOD local auctioneer will know that it is more than just the money...especially in rural Ireland. All we can do is offer advice and referee the parties. Worth the few quid in my opinion...but then I'm biased:rolleyes:

bob charles

No auctioneer has ever asked me for two half cheques together. around here its 50% 1st May, 50% 1st of September. I wouldnt give an auctioneer or anyone a post dated cheque for 5 months in advance. I know of one farm local around the 70ac mark of serious land and the leasee hasnt paid a dime for a number of years. made all the more difficult as he has no fixed abode and arrives on at very irregular times to check cattle. Cattle cant be touched by land owner, as would be set out by the dept. It will be interesting to know the finish up. I know of another farm where he left owing just north of 50k. thats a serious ouch, and the owner is a hard nut himself

PatQfarmer

bob charles wrote: »

No auctioneer has ever asked me for two half cheques together. around here its 50% 1st May, 50% 1st of September. I wouldnt give an auctioneer or anyone a post dated cheque for 5 months in advance. I know of one farm local around the 70ac mark of serious land and the leasee hasnt paid a dime for a number of years. made all the more difficult as he has no fixed abode and arrives on at very irregular times to check cattle. Cattle cant be touched by land owner, as would be set out by the dept. It will be interesting to know the finish up. I know of another farm where he left owing just north of 50k. thats a serious ouch, and the owner is a hard nut himself

Lucky your not in my area so, Bob!
Terms here are 2 chqs before entering land. Half even-date, half post-dated to Aug 1st. Rarely an issue with the p/d chq, it's always been done that way here. Usually a bit of slippage on tillage to Sept.
Sounds like whoever was looking after those two farms made a hames of it. Can't understand how they stayed in place after not paying for first year.
As we agree...it's down to the quality of the tenant. They have to be "vetted". Past performance is usually a good indicator.

bob charles

PatQfarmer wrote: »

Lucky your not in my area so, Bob!
Terms here are 2 chqs before entering land. Half even-date, half post-dated to Aug 1st. Rarely an issue with the p/d chq, it's always been done that way here. Usually a bit of slippage on tillage to Sept.
Sounds like whoever was looking after those two farms made a hames of it. Can't understand how they stayed in place after not paying for first year.
As we agree...it's down to the quality of the tenant. They have to be "vetted". Past performance is usually a good indicator.

but what I find is being a quality tenant is never treated with the respect they deserve, highest price wins around here, and thats rarely me, highest price dosent always pay the second 50% though

PatQfarmer

bob charles wrote: »

but what I find is being a quality tenant is never treated with the respect they deserve, highest price wins around here, and thats rarely me, highest price dosent always pay the second 50% though

Then I'll edit my last post...You're UNLUCKY you're not in my area so, Bob!
Those with a good payment history always favoured by me.
It's never a precise science, but common-sense will tell you if it seems too good to be true, it usually is.:D
This year in particular, there will be some horror stories where land rental is concerned. Be careful out there...

farmer1990

PatQfarmer wrote: »

Some locals may try to "get it cheaply" off you and use the "shur your uncle and me always dealt with each other" line.

Haha Every time I head into Town I'm getting the ole me and your uncle line haha, What I'm looking for is the best price so i don't have 2 worry about paying my way threw college. Before I got the land my mother had 2 tenants who were only paying her 4,000 in total for 80 acres because they were supposedly good friends of the family. Surely land can't be going for that cheap at the moment.

PatQfarmer

farmer1990 wrote: »

Haha Every time I head into Town I'm getting the ole me and your uncle line haha, What I'm looking for is the best price so i don't have 2 worry about paying my way threw college. Before I got the land my mother had 2 tenants who were only paying her 4,000 in total for 80 acres because they were supposedly good friends of the family. Surely land can't be going for that cheap at the moment.

Proves my point! Get a good auctioneer. Land demand will be high this year, stress to auctioneer that you want someone who will pay you!
Don't know the land, but excess €160pa for avg land, up to €200pa for good land in Tipp!

farmer1990

Is that 160 without maps Pat, I've been advised not too lease them out with the uncertainty of the cap reforms in the next few years??

bob charles

farmer1990 wrote: »

Is that 160 without maps Pat, I've been advised not too lease them out with the uncertainty of the cap reforms in the next few years??

I think some guys are going to get some fright with agreements like so. "Giving them enough rope" was what I was told by a paper pusher. I wouldnt rent ground without maps as I only need paper acres mainly for nitrates problems. The bloody Nitrates Directive cost us serious money each year by having to rent ground just stay within the law. joke of a system.

farmer1990

How does that work then bob, since I'm still getting single payments won't i lose those entitlements to the person I lease the land too??

mf240

farmer1990 wrote: »

How does that work then bob, since I'm still getting single payments won't i lose those entitlements to the person I lease the land too??

Nobody knows for sure what will happen but the most likely is an average payment per ha. In this case it will attach to the farm not the farmer. so you wouldn;t lose out by leasing/setting with maps.

New entrants will be looked on favourably under what ever system is introduced which you will still be after college.

What bob is getting at is if a farmer sends in maps but is not farming the land this is illegal. This hasent been enforced to date but they are clamping down on it now.

Around here 160 to 180 for good land with maps. Bad land less, but dear by comparison imho

1chippy

Be careful writing post dated cheques. I bought a machine and the deal was i write a post dated and try the machine for a week. The cheque was lodged and money removed before i got home. I rang the bank and their reply was due to current circumstances once a cheque is written regardless of the date put on it that same cheque can now be lodged.

bob charles

1chippy wrote: »

Be careful writing post dated cheques. I bought a machine and the deal was i write a post dated and try the machine for a week. The cheque was lodged and money removed before i got home. I rang the bank and their reply was due to current circumstances once a cheque is written regardless of the date put on it that same cheque can now be lodged.

yip, it wouldnt be the banks fault for cashing, there are a few reasons why I will never post date cheques. If I dont have the money you aint getting a cheque. Is post dating illegal? for some reason I think so, maybe not

freedominacup

bob charles wrote: »

yip, it wouldnt be the banks fault for cashing, there are a few reasons why I will never post date cheques. If I dont have the money you aint getting a cheque. Is post dating illegal? for some reason I think so, maybe not

Yes but the f'n revenue still accept post-dated cheques so go figure. A cheque is a written promise by you to pay the payee wharever figure that's on the cheque. In order for you to be in a position to honour this promise you need to know the funds are in your account, you cannot know this a month in advance never mind 6 months,therefore strictly it's a type of fraud. With that much said I have a cheque here with Fridays date on it and I bloody hope it passes:eek:

PatQfarmer

farmer1990 wrote: »

Is that 160 without maps Pat, I've been advised not too lease them out with the uncertainty of the cap reforms in the next few years??

Not legal to let land for annual grazing "without maps". You must be farming it at time of SFP application.
You don't need stock, but you would have to sell silage or hay off it and then maybe aftergrass to stay within the legal framework.
I think this is an area we will see a clampdown on very soon...

Tipp Man

PatQfarmer wrote: »

Not legal to let land for annual grazing "without maps". You must be farming it at time of SFP application.
You don't need stock, but you would have to sell silage or hay off it and then maybe aftergrass to stay within the legal framework.
I think this is an area we will see a clampdown on very soon...

And not before time

bob charles

PatQfarmer wrote: »

Not legal to let land for annual grazing "without maps". You must be farming it at time of SFP application.

land declared by the farmer must be subject to an agricultural activity by the farmer, either from the beginning of the year until after 31 May or from before 31 May to 31 December. Them's the rules from last year, this year will be the same or tighter criteria