anyone ever sell up and any regrets?

bigtomw

Hi lads,
Just wondering has anyone ever sold their farm for whatever reason, and what was the aftermath like for ye, I am seriously considering selling up for a number of reasons mostly purely personal reasons, but I am also trying to look at it from a business perspective, I am currently not getting much of a sfp as I have just started out farming, but if I sold up I would probably be able to afford 3 or 4 house which would provide me with a regular monthly income from rent, any experiences would be greatly appreciated

Username John

bigtomw wrote: »

Hi lads,
Just wondering has anyone ever sold their farm for whatever reason, and what was the aftermath like for ye, I am seriously considering selling up for a number of reasons mostly purely personal reasons, but I am also trying to look at it from a business perspective, I am currently not getting much of a sfp as I have just started out farming, but if I sold up I would probably be able to afford 3 or 4 house which would provide me with a regular monthly income from rent, any experiences would be greatly appreciated

Could you sell a few sites, get money to buy a house?

Then rent the farm on a long term leave - it wouldn't be as good a return as rental on a house, but its tax free...

I know it doesn't answer your post, but maybe food for thought...

Muckit

If you sell within 5 years of taking over you will have to pay the CGT.

Also renting houses isn't all it's cracked up to be unless you are going to become a fulltime landlord. You will have alot of expenses.

Just make sure rhat you weigh it all up before making the final call on it.

ganmo

Talk to a few current landlords to get their experience
You would want houses somewhere where tenants are easy to come by but near enough at hand that you can go and sort things our handily enough
There's also the possibility of leasing out the farm.

20silkcut

My father was in that game after selling his milk quota. It went well for him cause he got in when the boom was starting . Location is of paramount importance with houses. The biggest thing is the maintenance of the houses particular the older ones. I was left in the hot seat with one house after he died at the height of the recession and it was a bad experience. Semi detached 1930's house in a very mediocre rural town. Bad tennants changing every six months costing me 1500-3000 euro in repairs and improvements every time there was a change . Which was often funded out of SFP. Ended up selling it in negative equity and thank god every day I'm out of it.
Not putting you off but just beware of location and maintenance. You need to be in an area with plenty of good working tenants and or students .

Shelflife

Nothing soft about being a landlord, can be a nightmare if you're not careful or just unlucky.
Check out the accommodation forum for some good information.

kerryjack

Life would go on certainly worth considering if you have a bad place ,,sold most of the place here to forestry kept a few good fields rented them out to local dairy lad he wants to buy them off me now ,herself has an eye on a nice house in town ,a short stroll to all amenities have one car small dog handy living kids are up for it as well.still keep old house though.

patsy_mccabe

You could end up even more tied down with the dog.:D

joejobrien

Check put the rental sector first, talk to LL, go an vist house that have been let, Are you able to do repairs and maintence, deal with tenants,can you potential carry major repairs? Speak with accountant regarding taxation of same.....definitely no pot of gold!!!!
Since 2011 over 40000 units were sold from Landlord who what wanted out, only half reverted back......do I need to go on?????
Ask yourself is it a business after answering above.
Letting your farm on long term basis will provide you wit an income. Think carefuly

bigtomw

joejobrien wrote:

Check put the rental sector first, talk to LL, go an vist house that have been let, Are you able to do repairs and maintence, deal with tenants,can you potential carry major repairs? Speak with accountant regarding taxation of same.....definitely no pot of gold!!!! Since 2011 over 40000 units were sold from Landlord who what wanted out, only half reverted back......do I need to go on????? Ask yourself is it a business after answering above. Letting your farm on long term basis will provide you wit an income. Think carefuly

I wonder, are these landlords who would of been struggling to pay mortgages, because if I was able to buy the houses out right that would be one hurdle out of the way,

Miname

bigtomw wrote: »

I wonder, are these landlords who would of been struggling to pay mortgages, because if I was able to buy the houses out right that would be one hurdle out of the way,

I've a house sitting idle that used to be rented. Have had the roof fixed numerous times. The walls scrapped back because of evil spirits, had an agrophobic that smoked 60 a day, that took some cleaning. Had a family of drug dealers that brought various calls off the cops and even a couple of complete crazies. It's pure torture and when alls added up you need to be in an extremely good area with professionals. Students are great but you'd want to buy a shell and line the walls with sheet steel and still take a stupid deposit.

joejobrien

bigtomw wrote: »

I wonder, are these landlords who would of been struggling to pay mortgages, because if I was able to buy the houses out right that would be one hurdle out of the way,

yes some but not all,
Have u seen the rights tennats have acquired in recent years,
They can make s*** of ur place , essential walk away and if u are lucky to get a case againts them I bet u anything you wont recover cost of repair... more like 30/50 %:eek:
check out fourms in accomodation... make intresting reading. Oh yeah the landlord is been used as the fall guy for the goverments cop outs too.
Intresting discussion recently approx ROI 2/3%
Make up your own mind

Lady lou

Yea you can think of all the negatives to it. But what about things going right.
Mortgage paid on 4 houses bringing in 600/month is 2,400 a Month. And that's a below average rent paid around the country. Big demand for rented accommodation now.
You could get very good tenants don't forget and if you find them don't over charge on rent.
I'm renting a place at the minute off someone who has bought to rent! He gets his money every month without fail. I have not seen him or spoken to him since I moved in nearly a year ago now!.

Water John

Selling the land and deciding what to invest in are two separate but linked issues.
TBH, unless you have a project that clearly you can invest in/buy, I'd keep the land and long term lease it.

Being a landlord can be a fairly difficult proposition, not easy.

The fact that your farm lease income is tax free is a bonus that is hard to pass.

sober_investor

the OP should not think only in terms of buying a house to let out but if he does , he should focus on property in only dublin , cork , galway or limerick city and limerick city is way behind the other three , these are the only places going forward where economic expansion as well as population growth is going to be significant , i would not buy a house in rural ireland or in small towns if i got them for 10 k , add to that , you dont need to want to live in a property you buy to let , a one bed apartment in somewhere like smithfield in dublin is a better earner than a four bed detatched house in blackrock , the yield is far higher on the apartment but you can buy four of them , its all about generating cash

you dont have to invest in property the old fashioned way however , REIT,s ( real estate investment trusts ) are becoming popular in ireland and are hugely popular in the usa , a REIT is an investment fund which buys hundred and thousands of properties and allows individual investors to own a share in them , the ones in ireland are relatively new so the yield on them - dividend is not great so far , i can think of an american REIT however which currently pays out 4.5% after expenses , this fund owns around 30 billion dollars worth of property across the usa and is owned by vanguard who are one of the biggest fund providers in the world , this not only eliminates any issue with tenants as happens with traditional buy to let investments , it offers diversification in that the fund owns thousands of properties both commercial and residential so your not tied to the fortunes of the irish economy

that said , you are still investing in a single sector , were i to invest right now , i would put some in a REIT , some in a corporate bond fund and the rest in a high yield dividend fund , for example , there is a fund which covers the top 100 highest paying dividend companies on the FTSE ( the likes of shell , bp , gsk , vodafone , british american tobacco ) and right now the yield is 5% after expenses ( IUKD is the ticker symbol ) , this covers multiple sectors and while there is a currency consideration with sterling , the pound is still a very reliable currency , a global dividend paying fund would pay you about 3.5% and this covers the usa , europe and emerging markets , you could also invest in investment grade debt or corporate bonds , those funds pay about 3.5% yield

these are all non traditional ways of investing but they are hassle free and provided you have enough capital to put to work , they offer a very good way of building your NET worth over several decades , its how the very wealthy use their money to grow stronger

lets say you have a hundred acres of land , assume its worth 800 k and worth 200 euro per acre to let over ten years tax free , thats 20 k per anum in rent or a 2.5% yield , even you put the money in a combination of a global dividend paying fund and a corporate bond fund which have yields of 3.5% ( and thats about the most vanilla - conservative funds you can get ) , you are beating what the farm will generate each year , in all likleyhood the farm will not grow in value over the next thirty years to the degree the equity fund will as over the very long term , stocks beat every other asset class

even with tax breaks , land is a very poor generator of cash , if your no longer sentimental about it , i would sieze the opportunity to put the capital it has to work

pay for independent advice but dont go to a bank , banks dont give advice , they give a sales pitch , most are sales persons who know damn all about the markets

Water John

That's pretty good post Sober. Yes indeed many options need to be looked at.
Traditional landlord isn't the only choice.

If the land could be leased at €250 per acre though, the sum changes.
That gives 3.12% tax free.

joejobrien

Lady lou wrote: »

Yea you can think of all the negatives to it. But what about things going right.
Mortgage paid on 4 houses bringing in 600/month is 2,400 a Month. And that's a below average rent paid around the country. Big demand for rented accommodation now.
You could get very good tenants don't forget and if you find them don't over charge on rent.
I'm renting a place at the minute off someone who has bought to rent! He gets his money every month without fail. I have not seen him or spoken to him since I moved in nearly a year ago now!.

Yes I hear you loud and clear, But thats based on one year renting, put it over a 25 year experience as I have you can then you can begin to put meat on the bones.
Dont forget a few years ago, tennants told there LL that rent was been reduce by up to 50% in some cases, Loans stood constant . People have short memories
They are not for the faint hearted plus there are significant greater returns than RIP with less headaches out there
Taxation on this industry is also over zealous.
These are hard facts not sentiment.
You need significant capital appreciation in the futures.

J.O. Farmer

Water John wrote: »

That's pretty good post Sober. Yes indeed many options need to be looked at.
Traditional landlord isn't the only choice.

If the land could be leased at €250 per acre though, the sum changes.
That gives 3.12% tax free.

Sobers post was good. the only thing is high yield normally means high risk. Leasing land will have a garunteed income and an asset at the end which will be capable of generating an income.
Renting accommodation will generate more income but also more expenses and hassle. Even with good tenants general wear and tear will mean things will need fixing as in any house. Did I hear complaints during the week that some of them expenses couldn't even be written off against tax.
Add in the tax incentives to lease land longterm compared to income generated other ways and it becomes a more attractive option.

Water John

J O its very attractive if there is other income coming in.
Add anything from 20 to 40% to the diff.

Alibaba

As some others have said here just be careful going down the renting a house out route.

Know some other people who've done it and their houses have been wrecked, walls , carpets , furniture etc.

Cost them an arm and a leg to fix them.

That's not to say it could work out ok, but I'd say you just have to know your clients.

melissak

If you are handy at fixing things yourself being a landlord would be ok but the cost of hiring builders to fix things all the time is high for landlords with a few houses. It seems noone can fix a tap these days without the landlord paying a plumber. Plus painting every year etc

melissak

Do you not like farming?. Is there another enterprise you could have on your farm that would suit you better than your current enterprise?

kerryjack

Family Farming has changed massively in the last 30 years when I left school at 15 with 30 good cows and 60 acres 30 arable and 30 horrible I thought I was the luckest man on the planet. But.you soon realise when you get married and build a house and try and keep everything paid that the returns are not there to do it right. If you can't grow your business by 10 percent every year your in trouble, its inevitable that small family sized farms are going to be taken over because the kids are well educated and will move to the city's to take up well paid jobs and no one left at home, so its eat or be eaten in farming

melissak

Maybe you don’t need to grow your business but diversify and supplement your main enterprise with a sideline in something you/ your child enjoys and we might encourage the young to stick around

The Cuban

Hold on to your land, they aren't making anymore of it it.
The country is full of houses and plenty more will be built to meet any demand out there. Don`t go selling the farm to fund house purchases, if you want to buy to let fund it yourself with a deposit and a mortgage but keep the land

fepper

The Cuban wrote: »

Hold on to your land, they aren't making anymore of it it.
The country is full of houses and plenty more will be built to meet any demand out there. Don`t go selling the farm to fund house purchases, if you want to buy to let fund it yourself with a deposit and a mortgage but keep the land

Your like the BULL MC CABE himself the way you said keep the land, but agree with you but maybe he could sell a wee bit of it if he has more than he needs

9935452

Lady lou wrote: »

Yea you can think of all the negatives to it. But what about things going right.
Mortgage paid on 4 houses bringing in 600/month is 2,400 a Month. And that's a below average rent paid around the country. Big demand for rented accommodation now.
You could get very good tenants don't forget and if you find them don't over charge on rent.
I'm renting a place at the minute off someone who has bought to rent! He gets his money every month without fail. I have not seen him or spoken to him since I moved in nearly a year ago now!.

What if the 4 houses were worth 250k a piece so a mill for the 4.
2400 a month 28800 for the year .
Ball park pay half of it in tax and maintenance/insurance /etc.
You come out with 14 grand for a million of an investment.
1.4% return. not good,

kerryjack

9935452 wrote: »

What if the 4 houses were worth 250k a piece so a mill for the 4.
2400 a month 28800 for the year .
Ball park pay half of it in tax and maintenance/insurance /etc.
You come out with 14 grand for a million of an investment.
1.4% return. not good,

I would go for the two 500 k houses and get 3000 for the 2 a month and rent out to professionals less maintenance less hastle not hard to look after 2 houses.a spin to the city ounce a month.

melissak

Selling up to buy magic beans might be as profitable as buy to rent houses with the way things are going.

longgonesilver

I know a man who sold up. He had children but no successor. Mid sixties and knees and hips starting to give trouble. Decided that his children would appreciate some of their inheritance when starting off in life rather than twenty years later. Does he regret it? I don't know, but rumour is that most of it was invested in bank shares:eek::eek:

Water John

Any good professional will tell you to have a diverse portfoilio.
Many who sold land were inveigled by bank staff who saw the lump to invest in their own company shares. Poor advice from a number of angles. wonder tdid they get commission?

No one magic bullet. If you buy a house or two with part, make sure to invest the other part in non property related eg pharma/medical shares.

brandonw123

Would you consider planting it with forestry?
If you are young enough that you will be around in 35 years, it could be a good investment.
You still get to keep your land, get a good payment for next 15 years,
Excellent return when you clear fell after 30/35 years and as far as I know you can also keep your Sfp in the meantime.
If you have kids, it is a good inheritance to pass on as the cycle repeats itself when they clear fell.

Much easier than dealing with tenants.
being a landlord is not all it is cracked up to be !!

Willfarman

You are in a very enviable position to have a land as a liquid-able tangible asset. Most of us farmers are infected with an insane attitude to it in that we cannot be clinically business like about it.

The world is your oyster with a significant amount of money to invest. Buy a town pub or retail unit. Buy houses to let. Or

Invest in yourself and something you are passionate about and interested in. One large business I know of in north Wexford was started by a guy selling a sizeable farm because he had several daughters with no interest in it. The business he built up employs all his daughters and a son in law and a raft of employees too. The man has a energy and a happy persona i guarantee the land would never have provided him.

The rule of thumb a pal of mine uses in any business investment is would a bank loan me the money for this if I didn't have it..

Grueller

Willfarman wrote: »

You are in a very enviable position to have a land as a liquid-able tangible asset. Most of us farmers are infected with an insane attitude to it in that we cannot be clinically business like about it.

The world is your oyster with a significant amount of money to invest. Buy a town pub or retail unit. Buy houses to let. Or

Invest in yourself and something you are passionate about and interested in. One large business I know of in north Wexford was started by a guy selling a sizeable farm because he had several daughters with no interest in it. The business he built up employs all his daughters and a son in law and a raft of employees too. The man has a energy and a happy persona i guarantee the land would never have provided him.

The rule of thumb a pal of mine uses in any business investment is would a bank loan me the money for this if I didn't have it..

And a gentleman to boot.

Milked out

brandonw123 wrote: »

Would you consider planting it with forestry?
If you are young enough that you will be around in 35 years, it could be a good investment.
You still get to keep your land, get a good payment for next 15 years,
Excellent return when you clear fell after 30/35 years and as far as I know you can also keep your Sfp in the meantime.
If you have kids, it is a good inheritance to pass on as the cycle repeats itself when they clear fell.

Much easier than dealing with tenants.
being a landlord is not all it is cracked up to be !!

If your land is anyway good I couldn't agree with forestry. First off it will reduce the value of the land it's on by a half to 2/3rds and once you collect the premium and clearfell it has to be replanted without any premium. Leasing the land on a long term lease would be a much better prospect than forestry and you still have the land if you want to sell at a later date

melissak

Milked out wrote: »

brandonw123 wrote: »

Would you consider planting it with forestry?
If you are young enough that you will be around in 35 years, it could be a good investment.
You still get to keep your land, get a good payment for next 15 years,
Excellent return when you clear fell after 30/35 years and as far as I know you can also keep your Sfp in the meantime.
If you have kids, it is a good inheritance to pass on as the cycle repeats itself when they clear fell.

Much easier than dealing with tenants.
being a landlord is not all it is cracked up to be !!

If your land is anyway good I couldn't agree with forestry. First off it will reduce the value of the land it's on by a half to 2/3rds and once you collect the premium and clearfell it has to be replanted without any premium. Leasing the land on a long term lease would be a much better prospect than forestry and you still have the land if you want to sell at a later date

How much do you get per acre per year for forestry

brandonw123

Sell the good land ?
Buy two to three times as much "marginal" land for planting.
Better annual return, better return at clear fell

9935452

kerryjack wrote: »

I would go for the two 500 k houses and get 3000 for the 2 a month and rent out to professionals less maintenance less hastle not hard to look after 2 houses.a spin to the city ounce a month.

I still dont see the profit in it.
36k a year . I still reckon regardless you will be losing half of the money between paying tax, insurance , property tax , maintenance etc.
A more expensive house will attract better tennents but will also demand higher levels of maintenance. If you pay more in rent you expect more in return.
IE a student house has a 150 euro fridge. A 500k house would have a 700-1000 euro fridge .
18 grand a year return on a million isnt much. 1.8%. And thats not even gauranteed.

Grueller

9935452 wrote: »

A more expensive house will attract better tennents.

Not necessarily. My sister had a high value house and rented it to professionals. Two solicitors. They were an absolute pair of cnuts. Never paid a cent in rent for eleven months because they knew the law and were not afraid to use it to their own advantage. Sister was delighted when she got them in and twice as delighted to be rid of them.

kerryjack

9935452 wrote: »

I still dont see the profit in it.
36k a year . I still reckon regardless you will be losing half of the money between paying tax, insurance , property tax , maintenance etc.
A more expensive house will attract better tennents but will also demand higher levels of maintenance. If you pay more in rent you expect more in return.
IE a student house has a 150 euro fridge. A 500k house would have a 700-1000 euro fridge .
18 grand a year return on a million isnt much. 1.8%. And thats not even gauranteed.

Well I was thinking of location, location, location, and 2 houses are more manageable than 4 I would think. but I don't know a lot about it to be honest, I am struggling looking after one

barnaman

Water John wrote: »

That's pretty good post Sober. Yes indeed many options need to be looked at.
Traditional landlord isn't the only choice.

If the land could be leased at €250 per acre though, the sum changes.
That gives 3.12% tax free.

Not much land making €250 acre this year and I am not a million miles from the Golden Vale. €200 a year realistic for top land. Also lads seem to think just using 100 acres at 200 a year is €20,000 tax free; its not. You pay PRSI and USC on it just no income tax if a 7 year lease. Also need to pay stamp duty on the lease and have a solicitor draft it and have an auctioneer etc manage rent for each year. All those are fairly decent costs. Personally think a block of flats in Dublin etc managed by a letting company would give a better return

http://www.property.ie/commercial-property/St-Catherines-Church-Bridgefoot-St-Dublin-8/297391/

Better rerturn than a 200 acre farm by me for same money.