landlord - tenant cash lease workshop
Post on 01-Jul-2015
112 Views
Preview:
DESCRIPTION
TRANSCRIPT
University of Nebraska–Lincoln
Know how. Know now.
Please Thank our sponsors!
The Nebraska Soybean BoardNorth Central Risk Management Ed Ctr.
Landlord/Tenant Cash Lease Workshop
Sponsored by:
University of Nebraska–Lincoln
Know how. Know now.
Landlord/Tenant Cash Rent Workshops
Agenda Where we are (Current Prices) Landlord/Tenant Relationships/lease considerations Break Alternative lease arrangements Pasture Leases
Workshop – two words – work your brains – shop our ideas!
University of Nebraska–Lincoln
Know how. Know now.
Presented by:Jessica Johnson
Prepared by:T. Lemmons & A. Vyhnalek
Adapted from:B. Johnson. (2013). Nebraska Farm Real
Estate Market Report. UNL Extension
Current Land Values/Rental Rates
Contact:Jessica Johnson
jjohnson@unl.edu308-632-1247
University of Nebraska–Lincoln
Know how. Know now.
Northwest $715/ac
13%
North $1055/ac
20%
Southwest$1750/ac
31%
Central$3750/ac
27%
South $4460/ac33%
Northeast $6162/ac
24%
East $7185/ac
18%
Southeast $5400/ac26%
State Average $3040/ac
25%Source: Annual UNL Nebraska Farm Real Estate Market Surveys
Average Value of Nebraska Farmland and Percent Change from Year Earlier
University of Nebraska–Lincoln
Know how. Know now.
University of Nebraska–Lincoln
Know how. Know now.
University of Nebraska–Lincoln
Know how. Know now.
2012/2013 Values and Recent TrendsAgricultural
Statistics District2012/2013 All-Land
Average ValueDollars/Acre
2011-2012% change
2012-2013% change
Northwest 642/715 23 13North 855/1055 21 20Northeast 4908/6165 35 24Central 2925/3750 34 27East 6012/7185 31 18Southwest 1327/1750 34 31South 3352/4460 32 33Southeast 4293/5400 22 26Entire State 2410/3040 31 25
Source: Annual UNL Nebraska Farm Real Estate Market Surveys
University of Nebraska–Lincoln
Know how. Know now.
Selected Land Values by type 2012-13Land type Northwest North
Dryland – no potential $700 6% $1155 8%
Dryland – irr. potential $730 7% $1920 18%
Grazing – tillable $425 4% $1050 19%
Grazing nontillable $370 12% $500 11%
Hayland $780 26% $1150 21%
Gravity Irrigated land $2875 18% $3100 18%
Center pivot Irrigation land $3115 23% $5225 32%
University of Nebraska–Lincoln
Know how. Know now.
Annual Net Rates of Return to Land - % Northwest
University of Nebraska–Lincoln
Know how. Know now.
Annual Net Rates of Return to Land - %Statewide
1.8
2.8
3.8
4.8
5.8
6.8
7.8
6.0
2.9
4.9
1.9
7.1
3.4
Dryland Cropland Grazing Land Irrigated Land
Northwest 8.3
Northwest 4.4
University of Nebraska–Lincoln
Know how. Know now.
Average Effective Interest Rates on Non Real Estate Bank Loans Made to Farmers
University of Nebraska–Lincoln
Know how. Know now.
Alternatives for Investing?
Passbook savings Certificates of Deposit Stock Market/Bonds Gold (other commodities)
Gold
University of Nebraska–Lincoln
Know how. Know now.
Notes about Land Sales
First time in history – state sales topped $3,000 per acre
Statewide Northwest NorthCash Sales 49% 64% 27%Mortgage 47% 30% 55%Purchased by an Active Farmer/Rancher
81% 64% 59%
Out of State Buyer 2% 21% 8% Sold by Estates 38% 15% 17%
University of Nebraska–Lincoln
Know how. Know now.
Perfect storm for land value increase
•Availability of Money – profits from farming•Low interest rates•Lack of land for sale•Limited return from any other investment•Farmers willing to expand their operations
Future?! – Bubble might deflate (not burst?)
University of Nebraska–Lincoln
Know how. Know now.
Renting Farmland
University of Nebraska–Lincoln
Know how. Know now.
Reported Cash Rental Rates: Dryland CroplandAverage % Change
from 2012High Low
Northwest b b b bNorth b b b bNortheast 234 10 315 175Central 118 7 155 85East 219 7 281 165Southwest 59 5 73 46South 125 8 155 100Southeast 174 7 230 127Source: 2013 UNL Nebraska Farm Real Estate Market Developments Surveyb: Insufficient number of reports
University of Nebraska–Lincoln
Know how. Know now.
2013 Nebraska Dryland Cropland Rates Paid Per Acre
University of Nebraska–Lincoln
Know how. Know now.
University of Nebraska–Lincoln
Know how. Know now.
Reported Cash Rental Rates: Gravity Irrigated Cropland
2013 Average
% Change from 2012
High Low
Northwest b b b bNorth b b b bNortheast 319 12 394 280Central 260 13 352 212East 320 8 384 249Southwest 210 14 267 183South 275 11 323 216Southeast 299 12 359 242Source: 2013 UNL Nebraska Farm Real Estate Market Developments Surveyb: Insufficient number of reports
University of Nebraska–Lincoln
Know how. Know now.Reported Cash Rental Rates:
Center Pivot Irrigated Cropland2013
Average% Change from 2012
High Low
Northwest 225 13 265 170North 265 13 285 208Northeast 379 15 477 302Central 287 12 358 240East 355 13 441 281Southwest 269 14 325 210South 313 12 363 259Southeast 345 13 427 268Source: 2013 UNL Nebraska Farm Real Estate Market Developments Surveyb: Insufficient number of reports
University of Nebraska–Lincoln
Know how. Know now.
19811983
19851987
19891991
19931995
19971999
20012003
20052007
20092011
2013$0.00
$50.00
$100.00
$150.00
$200.00
$250.00
Cash Rental Rates for the Northwest District
Dryland Gravity Irrigated Center Pivot Irrigated
University of Nebraska–Lincoln
Know how. Know now.
University of Nebraska–Lincoln
Know how. Know now.
Reported Cash Rental Rates 2013: Pasture
Average % Change from 2012
High Low
Northwest 13 0 17 9North 16 0 20 12Northeast 53 4 67 38Central 35 6 45 26East 49 16 64 38Southwest 17 6 24 14South 37 3 43 54Southeast 42 8 54 28Source: 2013 UNL Nebraska Farm Real Estate Market Developments Survey
University of Nebraska–Lincoln
Know how. Know now.
Pasture Rents – by cow/calf pair per month
North NorthwestAverage 39.00 30.50High 50.00 36.85Low 30.00 24.65
University of Nebraska–Lincoln
Know how. Know now.
Cash Rent Summary
• Note Differences in numbers
• NASS survey
• UNL Cash Rent survey
• Coffee Shop
• Cash rents clearly up recently – but don’t always trend with land values (10% vs 20+%)
• When does the ‘up’ trend end?
University of Nebraska–Lincoln
Know how. Know now.
Gathering Storm Cloud
University of Nebraska–Lincoln
Know how. Know now.
Cash Rent Summary
Looking at corn prices, rents should stabilize, or start down Probably not the resource to support $500/acre rent
Rents are still determined by supply and demand
Tenants need to sharpen the pencil Landlords need to be understanding
University of Nebraska–Lincoln
Know how. Know now.
Jessica Jo Johnson Asst. Extension Educator Phone: 308-632-1247 Email: jjohnson@unl.edu
PanhandleAgEcon & WNEcrop
Extension is a Division of the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln cooperating with the Counties and the U.S. Department of Agriculture.
University of Nebraska-Lincoln Extension educational programs abide with the non-discrimination policies of the University of Nebraska-Lincoln and the United States Department of Agriculture.
Visit my website now!
go.unl.edu/pagecon
Don’t have Twitter?Get current Panhandle price & basis information
TEXT “Follow WNEcrop” to 40404AT&T, Verizon, C Spire, US Cellular, MetroPCS
Standard message & data rates apply.
top related