Ag agents: Land rental rates among most-asked questions

posted May 10, 2016 10:08 a.m. (CDT)
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by / Jim Massey, Editor | jimmassey@mhtc.net

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    Haugen
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    Hady

GAYS MILLS — The questions Richland County Agriculture Agent Adam Hady and Crawford County Agriculture Agent Vance Haugen get are often very similar.

“I just bought some rural property — now what do I do with it?” is a common question. 

Others ask how much they should charge to rent their land to neighbors, how to read soil tests or what they should do about an old well on their property.

Hady and Haugen put their heads together a few weeks ago and came up with a few topics they thought rural landowners might want to learn about, and offered their perspectives during a Rural Landowner Update on April 29 in Gays Mills. About 30 area landowners attended, including several who come to visit their rural property for the weekend.

“Vance and I had a sit-down pow-wow and came up with the program,” Hady said. “For a Friday afternoon, we thought it worked out pretty well.”

Topics included land rental issues, fencing, soil testing, well abandonment, rural landowner safety and land management for lumber sales.

“Several of the topics were questions we get all the time — how to use a chain saw, how to take soil samples on their property, forestry issues,” Hady said. “But probably the No. 1 question that comes through our office is land rental rates.”

Haugen told workshop attendees that rental rates vary widely in Crawford County, from zero to $280 per acre per year. 

“Yes, I’ve seen zero,” he said. “One landowner I know of told a farmer if you’re crazy enough to farm this land, go ahead.”

On the other end of the scale, the highest land rent he has seen in Crawford County was $284 per acre. That makes the median rental rate $142, although he said the most reported number he has seen is $124.

Hady said if someone calls him and says, ‘Hey, you’re the county agent, what is the land rental rate in Richland County?’, his answer is always, “It depends.”

“It’s kind of like buying a pickup — you have to know how old it is, whether it’s four-wheel drive, and if it’s a Dodge,” Haugen said. “The same thing holds true with land rental. Is the land easily accessible, is it on a south-facing slope, is there wildlife that gets in the field, the previous cropping history, etc.”

Hady said the land rental rate sometime depends on who else might be interested in renting the land — whether there is competition for the property. 

Some people analyze a land-rental agreement as a return on investment, Hady said. They come up with the value of what they think the land would sell for, and then look at a return-on-investment rate of 2 to 4 percent as an annual rental rate. 

“That gets to be a pretty good starting point,” he said.

Most Wisconsin land rental agreements are for three to five years, Hady said, and in this state, rental agreements can’t be for longer than 15 years. 

“It is your land, you can do it any way you want,” Haugen said. “You can change the (rental rate) every year if you wish, up or down. These are contracts — they can be verbal, or they can be written. Written is always better.

“Love everybody, trust everybody, but get it in writing,” he said. “It is not strictly necessary, but it is much better.”

One workshop attendee said he lives 200 miles away from his Crawford County land and rents it out as a trade for labor, keeping the fence lines in good shape.

Haugen said lots of people use similar barter arrangements, and “there is nothing wrong with those.”

Verbal lease agreements are enforceable but only on a year-to-year basis, Haugen said. In other words, if an agreement is not in writing, the lease can only be for one year. 

Haugen said he would suggest that landowners consider the profitability of the renter when renting land. For example, commodity prices have dropped in recent years, so it is much more difficult for a farmer to make money growing crops. 

Landowners can also rent their land for hunting or even gathering morels, Haugen said.

“I saw a woman coming out of my woods one day with a large container full of morels, and I asked her what she was doing,” Haugen said. “She said the woods are for everybody. I told her they are this year, but they aren’t next year.

“So you can lease out your land for hunting deer, turkeys, small game or gathering morels. Most of you have great memories like me, but my memory is really short. If you don’t have it written down, you might not really know what you agreed to.” 

Haugen said he knew of one landowner who made an arrangement with a hunter by which the hunter worked three eight-hour days in exchange for seven days of deer-hunting privileges. 

Hady said he and Haugen might follow up with other rural landowner meetings, depending upon the feedback they get from a survey of participants.

“One of the best parts of the afternoon was the after-meeting conversations between the foresters and the landowners,” Hady said. “I heard landowners asking each other, ‘What are you doing,’ and ‘What are you doing.’ That networking can be invaluable.”

For access to a variety of fact sheets on rural landowner issues, visit the Crawford County Extension website at http://​crawford.uwex.edu, click on “agriculture” and then click on Rural Land Owners Update Fact Sheets.






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