Leasing to Farmers
If you inherit tillable land but don’t have much farming experience yourself, you can lease your property to other farmers. There are always farmers looking to lease tillable acres where they can grow more cash crops like corn, soybeans, or wheat. By allowing them to do so, you are creating a passive source of income while having someone else maintain your property.
Allowing farmers to work the land helps current pastures from being overtaken by undesirable grasses, shrubs, and trees. Also, if you don’t live near the property, you can be confident it is being actively monitored by someone else who is invested in its well-being.
Crop Share Leasing
A crop share lease can be organized in multiple ways. It is difficult to manage if you (the landowner) don’t have any farming experience, however, if you have experience it can be a great way to minimize your inputs and still have a share of the crops being produced. In a crop share lease, the owner and tenant are splitting both the production costs and profit.
The location of your farm and the crop that is being produced dictates common share percentages. Some crops are more profitable than others. You could form a normal crop share lease where the decisions, expenses, and crops produced are all split 30/70. That means the owner covers 30% of expenses and receives 30% of the crops produced. The farmer is responsible for the other 70%.
Cash Rent Leasing
Cash rent is what comes to mind when most people think of a lease. The agreed upon amount of cash is paid upfront, and the farmer assumes all risks and rewards. This is preferred by most farmers as they have more to gain from a profitable crop.
As the landowner, you don’t have to wonder how much money you’ll make from the lease over the course of the year like in a crop share. Cash rent is the most common type of farming lease agreement across the country and is generally the easiest lease to manage.
Leasing to Hunters
Another group to consider leasing your land to is hunters. It doesn’t have to be one or the other. You could lease your new land to farmers and hunters at the same time! The right group of hunters will be just as interested in improving your land’s habitat and wildlife populations as you are.
If you will allow them to, many hunters will want to help improve your property’s ability to house more game like deer, turkey, and small game. You may make it a part of your lease agreement that members could participate in habitat improvement projects like controlled burns, timber stand improvement, or food plot installations if you wanted to. Just make sure you are legally protected in all events.