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Rent Or Buy Farmland
You’ve got your eye on farmland that just came up for sale, or to rent. Making the decision to own it or lease it has many dimensions and can’t be made lightly.
Craig Askim is an extension agriculture agent at North Dakota State University. He says whether you rent or buy, learn all you can about the property, especially the productivity and cropping history. Renting is usually a cheaper option and involves a short-term contract. But, it’s critical to know what you’re getting.
"Why is it being offered for rent?," he asks. "Is it because it’s been mismanaged in a way that it’s very unproductive as far as mismanagement, as far as chemical inputs or fertilizer inputs which would really limit your ability to which crops you could grow on that type of land?"
Buying the land is a long-term capital investment and you’re building equity into your operation. You also have total management rights of the property. But with that control comes responsibilities that a renter would not have.
"If it’s been mismanaged, then obviously you have to get that land back into production readiness," says Askim. "If there’s any water or drainage problems, you take that responsibility. Any zoning laws or anything like that that’s on the land, you’re responsible for all that."
Askim also emphasizes expressing your concerns and thoughts with others involved in the operation and talk about what happens if you as a land owner or renter are no longer a part of the operation.