Isanti County MN - Going land rent????

Hello,

Trying to help a friend determine appropriate land rent rate in Isanti County MN.

His land parcel (estate settlement) is included in about 80 acres that is all next to each other, though not one field.

What would the normal range of land rent be?

Also, I am getting conflicting info on the land being in the farm program, or not. The land owner I am talking to says they have not gotten any correspondence from the Feds. They have owned the land for several years already.

Thanks

I do not know what the rental rates would be for that area. If they are currently renting their ground to someone then that renter could be setup as the "operator" of the farm and then the owners would not get any thing from the FSA office. Also if the ground has been in soybeans for years then they would not be any program payments to get.

If none of the heirs have been to the FSA office then the FSA office may not know about the land ownership change. The FSA office may still have it as a single parcel. This could be the way it is easily if the same person is still farming all of the ground.

Also it sounds like a classic "raise the rent" because "I am a land owner now" case to me. If they are asking "friends" for land rent information that do not live in that area, it really sounds like that.

I would just about bet that they have read or heard of the high rents that some good ground is going for and now think their ground should be getting that higher rent. The issue is whether their ground is good ground or not. There is some high rent ground in MN but a lot is not good ground and rents for WAY less. The rents can be way different just miles apart in MN as the ground can be very varied in areas there.

Also make sure and tell them that rental rates are going down because of reduced grain prices.

I am trying to be cordial in this response but HEIRS and "new" absentee land owners really can be a pain to deal with. They all think they should be getting the HIGHEST RENT that they have ever heard of because "DADS/UNCLES" farm is the BEST of the whole area. Many times they have ZERO knowledge of the actual value of the ground or it productive value.

You need to give more info on where it is in Isanti
Co. There is a HUGE range in land rent in that Co.
It is the next county SW. from me and I farmed there
for years. There are places where the land is about
as good as it gets north of Minneapolis and places
where the sand is so poor it won't grow grass. Rents
range from $50.00-150.00/acre but are dropping.

Unfortunately, this 5 year average mn rent by county will not
be as helpful as it sounds....

That can be a sandy, wooded county, but throw in some
specialty crops, and its a wild frontier of worthless to high
dollar ground in an area like that.

Paul
U average land rents minnesota

Quite a few people around here are paying stupid money for marginal ground. There is little consideration by landlords as to the quality of their land when there are plenty of "gotta farm" renters to choose from. There are too many people playing with exotic forms of money to have rent or sale prices reflect a return on farm enterprise production. Add to that the guy who is farming on a huge scale and has the money to overpay several times over what a small tract of land is worth based on agricultural productivity. I know of farmers blowing other prospective buyers out of the water on 100 acre pieces because they are willing to throw the kitchen sink (of which they obviously have an extra) to get it. It is surprising as to where land has gotten to. But if land is going for 10,000 dollars I don't see short of pure speculation how it is going to 20,000, 30,000, 40,000 dollars. And we all know the downside of speculation.

JD and 986, you guys hit the nail perfectly on the
head. Sadly there is always someone out there
that will pay more. On the flip side there is the
one where Mom rented to the same guy for the 15
years since Dad died and she always liked him so
never questioned the rent he was paying her. Mom
was able to pay the taxes and insurance and live
quite comfortable on her social security and the
rent he was paying and renter would bring her a
big ham every year at Christmas so she never
raised the rent. Renter never volunteered to
raise it because that's the one piece he had that
could make up for the stupid high rent he was
paying on that other piece. Now it is in the
hands of the heirs and it is time to pay the
piper. Doesn't matter if he offers to pay more
now that he has been caught. They are going to
throw his azz out because of all those years he
took advantage of Mom. I have seen it both ways.

Put out a shout for M Nut.

My in-laws live in Isanti county. Father-in-law grew up on a
dairy farm, but has worked off farm since. He does keep up on
all farming activities, and we just talked about land rent within
the last month as he is looking at buying some additional land.
He won't farm it himself, but will be renting it out. It is currently
rented out to a farmer he knows, and the current owner is
being paid $120 per acre. Sounded like the farmer would be
willing to go to $125 if my in-laws do purchase the land, as the
current owner has not raised rates in the last few years. Hope
this helps.

Probably not helpful here, but will throw it in
anyway.
Back in my working days I became acquainted with a
small building construction/ real estate owner
outfit. Father & 2 sons operation. Beside doing
construction, they owned a mix of residential,
commercial, & farm land. Not a hard rule, but a
starting point. This was in southern Mn, close to
Paul, Flying Belgian, & Kow Farmer.
The old man said rent income should be 1% of cost
monthly. That would pay for the investment, real
estate taxes, insurance, upkeep, & a reasonable profit.
Eg: a $500,000 commercial building should
bring $5,000 rent monthly.
Single family residential they wanted 3/4 of 1%.
Farm land was split rate. Tillable land brought
1/2 of 1%, while a building site brought 3/4 of
1%. Tillable land was taxed at a lower rate than
building sites, & didn't have structures to
insure. A 500 acre farm with 5 acres of buildings
would be 495 acres at 1/2%, while the 5 acres with
house, barns, sheds etc brought 3/4%.
Being in the construction business, they had a
close tab on their costs. Times have changed
somewhat, interest rates are a lot lower now. Also
farm land prices & building construction costs are
higher now.
Willie

Check with FSA office.

Rent here goes for $250 - $350, most CSR 80 or above.

Just curious if there are any crop share arrangements an if so what splits are you seeing?

Thanks for all the replys. I was hoping Jon F would reply since I knew he was relatively close by, and he did, plus all you others. THANKS!

If this land was in SW MN I could have given the land owner a good answer, but SW MN vs north of the Twincities are totally different.

The reason the landowner asked me was because several years ago when they had mentioned what they were getting (less than $50/acre), I said that was too low. The landowner is not out to get every last dollar or even close, but they are being asked to sign a multi year lease.

I have been waiting on several friends of friends to get back to me on some info/details, but that is not happening. I really do not want to put a lot of details on the internet since this is not my land.

So, I am just going to tell the landowner the range is $50 to $150 but dropping, UofM average is $86 (thanks Paul). The tillable land is not all in one piece, but not all small pieces either.

I am also going to point them at the local FSA office (Cambridge) and suggest they may want a tax person who is familiar with farms, though probably not as important.

If I get any more shareable details, I will update.

Thanks again.