Building a shed for renting??

kboc

Does it pay to build a shed for the sole intention to rent it out?
How much is B&B rates?

Farmer Pudsey

kboc wrote: »

Does it pay to build a shed for the sole intention to rent it out?
How much is B&B rates?

No it would not be. B&B involves feeding of cattle so add in tractor costs as well. In general it would not qualify for grant purposes. However a shed would cost 6-10K/bay depending on level of finish, spec and size. I think that a lad near me rents out a shed at about 1 euro/head/week. That is equivlent to 15-20 euro/week per bay or 60-80/week for a 4 bay shed depending on bay size.

Muckit

God twud be grand along with the pension!!!!!

Farmer Pudsey

Muckit wrote: »

God twud be grand along with the pension!!!!!

In general lads that rent such sheds do for minimum time possible. Maybe from early December to late March. So 12-14 weeks. You would wany 16' slats with a good toe space to get 20/pen. In general it is around 15/ full bay. If you had a 4 bay shed client might only want 2-3 bays and you cannot let someone else in. But even if you do manage to fill an average shed at 60/week it would only generate 800 euro over a winter.

You then have the cost of the electricity and the water unless these are on a seperate meter.

Reggie.

It's around €1.50 a head here a day

kboc

I currently rent 22 acres of grass to diary farmer.

they have 3 or 4 hundred milkers and then a load of heifers and some beef.

With the total number of cattle they have, the shed would be used all winter and probably into spring summer. They simply have not got the land of acres for the number of cattle to graze outside, ground is for making silage to feed indoors in general, most of the year.

they are also forever shifting slurry around from their main home farm tanks to other tanks during the winter as they fill up in no time. when I mentioned this to the farmer his eyes lit up. Demand not a problem.

This shed would be built on the 22 acre site they rent off me. So I would be doing nothing (they will cut silage they feed silage, everything) other than lift money off them.

Would it pay in this way? I was thinking along similar lines to Muckit, a good pension.

sucklerlover

kboc wrote: »

I currently rent 22 acres of grass to diary farmer.

they have 3 or 4 hundred milkers and then a load of heifers and some beef.

With the total number of cattle they have, the shed would be used all winter and probably into spring summer. They simply have not got the land of acres for the number of cattle to graze outside, ground is for making silage to feed indoors in general, most of the year.

they are also forever shifting slurry around from their main home farm tanks to other tanks during the winter as they fill up in no time. when I mentioned this to the farmer his eyes lit up. Demand not a problem.

This shed would be built on the 22 acre site they rent off me. So I would be doing nothing (they will cut silage they feed silage, everything) other than lift money off them.

Would it pay in this way? I was thinking along similar lines to Muckit, a good pension.

I'd venture carefully. How many years rent will it take to pay it off. He might get sick of the rat race of big cow numbers and cut back leaving you with a white elephant. I'd nearly say a rental property would pay better than that.

dzer2

If I was building a shed to rent it would be a secure lock up one that could be subdivided and rented to joe soaps as monitored lock ups

lakill Farm

Reggie. wrote: »

It's around €1.50 a head here a day

€1.50 is B&B - silage only?

the €1 a head a week is shed space only


I know a lad who gets €1200 for a 3 bay shed ( 48 x 20) for the winter. Its in cavan so longer winter . The lad who rents also pays for the slurry to be put out and the shed to be powerwashed so another €300 expenses I guess?

Reggie.

lakill Farm wrote: »

€1.50 is B&B - silage only?

the €1 a head a week is shed space only


I know a lad who gets €1200 for a 3 bay shed ( 48 x 20) for the winter. Its in cavan so longer winter . The lad who rents also pays for the slurry to be put out and the shed to be powerwashed so another €300 expenses I guess?

Think that's was grazing only

Farmer Pudsey

lakill Farm wrote: »

€1.50 is B&B - silage only?

the €1 a head a week is shed space only


I know a lad who gets €1200 for a 3 bay shed ( 48 x 20) for the winter. Its in cavan so longer winter . The lad who rents also pays for the slurry to be put out and the shed to be powerwashed so another €300 expenses I guess?

48X20 would hold 60 weanlings/yearlings I presume that in Cavan a 20 week rental period at least would be the norm. that works out at 1 euro/head/week.

OP in your case it may be a runner. If you go for a longterm lease lesee can apply for grant if it comes out later in year. It is just to have everything tied down. Not sure if you can use capital allowances against rental income. However he may be able to

Tank is critical in this situtation go 9'deep and go 16'slat. However 3 bay would be more than adequate for plot size

Jimlh86

IMO this sounds like madness? What money would you put the shed up for?

frazzledhome

120 days * 60 @€;1/day = €7200
120 days * 40 @€;1/day = €4800
120 days * 48 @€;1/day = €5760

Question is would you get €1/day with no feed. If you do it's a no brainer. If you take 3 span with 38 cattle €4500 and you can build for 45k its 10% where else would you get it?

According to people here sucklers are loss making yet people spending €0000 on sheds with no return.

tomieen jones

frazzledhome wrote: »

120 days * 60 @€;1/day = €7200
120 days * 40 @€;1/day = €4800
120 days * 48 @€;1/day = €5760

Question is would you get €1/day with no feed. If you do it's a no brainer. If you take 3 span with 38 cattle €4500 and you can build for 45k its 10% where else would you get it?

According to people here sucklers are loss making yet people spending €0000 on sheds with no return.

no one will pay that kind of money renting a shed surely? Think you're maths are wrong devide that total by 7 ?

frazzledhome

tomieen jones wrote: »

no one will pay that kind of money renting a shed surely? Think you're maths are wrong devide that total by 7 ?

Are they? 48 cattle @€;1 = €48/day if its 120 days is that not 48*120 giving €5760. Am I missing something?

You're right no one would pay that with no feed

Farmer Pudsey

frazzledhome wrote: »

Are they? 48 cattle @€;1 = €48/day if its 120 days is that not 48*120 giving €5760. Am I missing something?

You're right no one would pay that with no feed

Yes you are missing something it is a eruo/head/week with no feed for weanling/yearling cattle.

Normally I would have said it was not viable. However OP has posted that his longterm tenant would take and he is in Cavan . 20 week+ winter. 3 bay shed with 20' deep pens would carry 20 such cattle/pen. this is 60/week or 1200 euro/year. If he signed a longterm lease tenant can claim grant I think and vat back. However I am not sure that OP can claim capital allowances.

_Brian

frazzledhome wrote: »

120 days * 60 @€;1/day = €7200
120 days * 40 @€;1/day = €4800
120 days * 48 @€;1/day = €5760

Question is would you get €1/day with no feed. If you do it's a no brainer. If you take 3 span with 38 cattle €4500 and you can build for 45k its 10% where else would you get it?

According to people here sucklers are loss making yet people spending €0000 on sheds with no return.

I'm not sure about the % return. You can't really compare it to other investments. You can't really sell the asset to get your principal back.

I can buy a 3 bed terrace near me for €50k, spend €5 k prepping. And rent for €550-600 a month 12 months round. And get my principal back, or most of it, or perhaps even my asset may increase in value.

I agree though. I can't see how big money is being paid for sheds.

Chap I know has sheds rented with feeding, he's getting €20k, he got similar money of the same chap last year and the lad renting lost his shirt on the cattle last year. How come he's back again this year again?
If a fella had sheds idle it makes sense to let them out like that.

frazzledhome

Did someone say €1/hd/wk? If that's the case you'd bead to do it unless of course you could see yourself using it in the next few yrs. if you did need it you'd be better renting a shed at that price.

So my position on sheds still stands 0% return

enricoh

Build a shed n subdivide it for normal Joe soaps if u are anyway near a busy town. A mate of mine rents containers out in his yard e30 a week, costs him e1500 for a container. Paid for in one year n then lads park their boats, diggers n even an ice cream van there- money for jam!

locha

I think a couple of factors come into play here. One you do get a tax write off over 8 years for the cost of the shed. You can set this against your income. However the cash is obviously sunk in upfront and you will get your payback over the next 30/40 odd years. Also what is your marginal tax rate? If you are at the 50% range the shed will effectively cost you in real terms 1/2 of what you paid.

On the postive side if you have a guaranteed renter there is very little maintenance with the shed (unlike a house) over the term of the next 30 years. However the downside is that you can never get the money you spent on it back.. It's been poured into a hole in the ground on your land.

I think you need to really do the sums on it and cost it out and look and see what else you could buy with the money.

Farmer Pudsey

locha wrote: »

I think a couple of factors come into play here. One you do get a tax write off over 8 years for the cost of the shed. You can set this against your income. However the cash is obviously sunk in upfront and you will get your payback over the next 30/40 odd years. Also what is your marginal tax rate? If you are at the 50% range the shed will effectively cost you in real terms 1/2 of what you paid.

On the postive side if you have a guaranteed renter there is very little maintenance with the shed (unlike a house) over the term of the next 30 years. However the downside is that you can never get the money you spent on it back.. It's been poured into a hole in the ground on your land.

I think you need to really do the sums on it and cost it out and look and see what else you could buy with the money.

If the rental income from a farm is treated like a house you cannot offset capital costs pre rental. You would need to check this out.

Fuxake

locha wrote: »

I think a couple of factors come into play here. One you do get a tax write off over 8 years for the cost of the shed. You can set this against your income. However the cash is obviously sunk in upfront and you will get your payback over the next 30/40 odd years. Also what is your marginal tax rate? If you are at the 50% range the shed will effectively cost you in real terms 1/2 of what you paid.

On the postive side if you have a guaranteed renter there is very little maintenance with the shed (unlike a house) over the term of the next 30 years. However the downside is that you can never get the money you spent on it back.. It's been poured into a hole in the ground on your land.

I think you need to really do the sums on it and cost it out and look and see what else you could buy with the money.

Yeah and the rental income is taxable at 50% too!! Also questionable if you get a capital allowance right off if you are not a practising farmer but I'm open to correction on that. IN general, you gotta ask why aren't the lads with the stock building the shed themselves if it's such a good idea to rent to them?

Carrigogunnell

A euro a week does not pay a euro a day is good money. I did a bit of B and B this winter 10 cows at .85 a day and 9 weanlings at .65 a day no silage provided man had his own and I got paid to draw it to. Don't tink this is bad for 2 pens that would be lying idol.the owner in question is not in farming for financial reward just hobby