Renting land to farmers

[Noah Milstein]

I'm doing some exploratory research and thought I'd tap the BP hive mind in that process. I'm interested in acquiring land to rent out for farming. My assumptions going in are that the land would need to have some set of desirable cultivation traits (soil quality and access to water for example) and potentially meet local zoning requirements for agriculture. Aside from those points, I'm not sure how to find or market to farmers looking to rent land for cultivation. Are there popular markets that service that population? Where would one look to find farm-renters?

[Bill B.]

It’s a HORRIBLE return on the money. At least “regular farming” (corn/soybeans) in MN. 

A quarter, 160 acres, is worth about $800k to $1.2mil depending on quality and tillable acres. That will bring in about $30k in rent assuming commodity prices recover. 

So rental income $2500/mo minus some tiny expenses for property tax and insurance on roughly a million dollars. Buy 2 x $250k houses and you’ll do better. 

Ps. Unless you’re inheriting the land they usually want 50% down for farmland loans.

The only people I ever see rent it out are “kids” who inherit the family farm, auctioneers who get the land for a steal when nobody bids and get the auction fee discount, and finally a few small town doctor/lawyers/businessmen who pay cash because they want to own something they can see/feel touch, even if they don’t earn much.