Borrowing money to buy a farm

GrasstoMilk

K.G. wrote: »

I m dont know anybody paying 300 an acre and i am renting land off 7 people.

Tillage guys driving it over 300 around here
Wouldnt be quiet north wexford but near enough
Plus give back entitlements at that
I know because i dropped out of a farm at 280 an acre and it kept going between 2 others

Best of land not far from Ferns last year went for 10k an acre

Say my name

GrasstoMilk wrote: »

Tillage guys driving it over 300 around here
Wouldnt be quiet north wexford but near enough
Plus give back entitlements at that
I know because i dropped out of a farm at 280 an acre and it kept going between 2 others

Best of land not far from Ferns last year went for 10k an acre

The same people I believe are taking land for tillage near me too.
Bales of straw left out in the rain and just not able to get the work done on time with the amount of land farmed.

There must be something else going on.
Are they one of these ones with permission for a solar farm and just looking to keep the number of acres up under them at any price?

Google where they're from and solar farm.

wrangler

Panch18 wrote: »

I dropped out of bidding war at 285 a few weeks ago for 25 acres - it finished at 320 i believe

Tbf the gross output of cows is €2000+/cow and rented land is facilitating that......
but I don't know how tillage famers are doing it or even why!!!!

Grueller

33 good acres today a few miles from here was auctioned. House on it that is liveable for the minute but would ultimately need the price of a house spent on it in time. Yard would be 30 years outdated with an obsolete parlour and housing for 50ish cattle. Slatted unit but again near obsolete.
Brought €670,000.
€20,300 per acre.

Dinzee Conlee

Grueller wrote: »

33 good acres today a few miles from here was auctioned. House on it that is liveable for the minute but would ultimately need the price of a house spent on it in time. Yard would be 30 years outdated with an obsolete parlour and housing for 50ish cattle. Slatted unit but again near obsolete.
Brought €670,000.
€20,300 per acre.

Best of luck with it Grueller!

Grueller

Dinzee Conlee wrote: »

Best of luck with it Grueller!

Haha. I haven't 670 shackles let alone thousand.

Mooooo

Smaller parcels also have more buyers, those that wish to take up hobby farming, possibly more neighbours with which it would be within means of buying, those looking for other assets for cash, people thinking why pay 600k for a house on it's own when you could get one with a block of land etc...

kk.man

wrangler wrote: »

Tbf the gross output of cows is €2000+/cow and rented land is facilitating that......
but I don't know how tillage famers are doing it or even why!!!!

Tillage farming is not just about spring barley anymore. They are beans, maize etc as break crops and cover crops too. They know their stuff with huge acres. They are tied in with millers. The storage facilties are also on scale of a millers yard. They are a few around here with maybe 3k acres. They would have a good stretch owned too. They don't seem to be able to buy ground though.

Large bottle small glass

I have it from two accountants that have a lot of farm inheritance clients, lot of wealthy folk are using agricultural land as a means of avoiding inheritance tax when transferring wealth to their children.

A person with 4 children can transfer over €13M tax free to his/her offspring. Widespread with a certain horsey set in my neck of the woods.

That and being able to get a tax free 3 or 4% return is beating a lot of competition in the current market.

Hard to make a living competing with lads playing around with free money

EvanFahy

duffysfarm wrote: »

if you were to buy land at an all-in price of €10,000 per acres. Lease this land for €300 an acre. if this lease were a qualifying lease and no tax was payable on the rental income then this could be considered a very good return in comparison to whats out there on offer at the moment

At the figures stated above that investment would have a 3% cap rate, a cap rate is your return if you paid cash.

*This calculation is presuming no expenses, 100% occupancy, and no missed leased payments

If you decide to take on debt this may increase your return on investment (ROI) if the interest rate on the debt is lower than your cap rate which is 3%

It's not the place id be putting money at the minute.

Thanks,
Evan

wrangler

EvanFahy wrote: »

At the figures stated above that investment would have a 3% cap rate, a cap rate is your return if you paid cash.

*This calculation is presuming no expenses, 100% occupancy, and no missed leased payments

If you decide to take on debt this may increase your return on investment (ROI) if the interest rate on the debt is lower than your cap rate which is 3%

It's not the place id be putting money at the minute.

Thanks,
Evan

Where can you put it to get more than three percent tax free, probably equivalent to five percent in real terms.
I'd rather be dealing with farmers than most of the house tenants out there

Mooooo

The stock market can average out at 6% but taxation isn't great on it in Ireland unless its thru pensions. If you had money self administered pensions can allow you to invest in housing property and get the rental income tax free I think

wrangler

Mooooo wrote: »

The stock market can average out at 6% but taxation isn't great on it in Ireland unless its thru pensions. If you had money self administered pensions can allow you to invest in housing property and get the rental income tax free I think

Experienced investors might be getting 6% , I'm investing in lowrisk funds and they're certainly not yielding even three percent. As for money I invested before the crash, there's one struggling to get back to precrash levels....... every one was investing high risk then. Pension is doing very well though

Mooooo

wrangler wrote: »

Experienced investors might be getting 6% , I'm investing in lowrisk funds and they're certainly not yielding even three percent. As for money I invested before the crash, there's one struggling to get back to precrash levels....... every one was investing high risk then. Pension is doing very well though

Funds that track the stock market have been growing at 7% I think for the last 20 years, including the crash, those that went in directly after the crash had 20% lift I think. In Ireland tho investing in those you get 41% exit tax and I believe even if you don't exit every 8 years the government take 41% even tho its potential not realised profits

jfh

wrangler wrote: »

Experienced investors might be getting 6% , I'm investing in lowrisk funds and they're certainly not yielding even three percent. As for money I invested before the crash, there's one struggling to get back to precrash levels....... every one was investing high risk then. Pension is doing very well though

About to start a pension myself, mind me asking where you took it out?

Pkiernan

wrangler wrote: »

Where can you put it to get more than three percent tax free, probably equivalent to five percent in real terms.
I'd rather be dealing with farmers than most of the house tenants out there

The US markets have been returning double digits annually since 2009.