Farmland

Last night after tennis, Bill Carwell said that in Arkansas, farmland was renting for a low of $85 per acre per year and a high of $135 per acre per year.  These are rough numbers.  He said there was some really high quality farmland that had recently changed hands at $4600 per acre.  Bill said that there were all different deals, but that one fairly common deal was to rent land for a low flat rate and then take some percentage of the profit (if any).  That way the landlord gets a guaranteed minimum and a chance at more, whereas the farmer only has to pay the low flat rate if it turns out to be a bad year.  Bill rents land for 25% of the profit and no base rent.  I can't remember if he meant that he leases land TO other farmers or if he leased land FROM other landlords.


He said that it would be hard to buy farmland and make more than 3 or 4 percent on your money.  His land is extremely flat.  It is either dead level or it slopes 2 tenths of a foot in 100 feet ( I think).  It is irrigated.  John Brewer's land has been rented to the same farmer for 20 years.  It is apparently rented on a percentage-of- profit basis.  John would like to rent it for a flat rate, but does not know who to talk to about it.  Apparently his current renter does not want to rent for a flat rate.  John's land is not flat and is not irrigated.  It would be too expensive to flatten John's land.