Planning for future - buying land

vikings2012

Hi there, I am part time farming at home with my father. He has 40 acres. Farm is too small for both of us to make a living off it. I have a full time job off farm. For the last year or so I am trying to grow the home farm but land availability is restricting me. I plan in the next 6 years to purchase my own farm (60-100 acres and hopefully within a suitable radius from the home farm). I have about 50k saved so far. Just wondering if you have any guidance for me in relation long term saving and long term planning for getting a loan. Any experience you might have would be greatly appreciated. I’m 24 living in Waterford.

mycro2013

vikings2012 wrote: »

Hi there, I am part time farming at home with my father. He has 40 acres. Farm is too small for both of us to make a living off it. I have a full time job off farm. For the last year or so I am trying to grow the home farm but land availability is restricting me. I plan in the next 6 years to purchase my own farm (60-100 acres and hopefully within a suitable radius from the home farm). I have about 50k saved so far. Just wondering if you have any guidance for me in relation long term saving and long term planning for getting a loan. Any experience you might have would be greatly appreciated. I’m 24 living in Waterford.

Try to rent additional land to build stock and increase the repayment capacity of farm. Are you involved in agriculture off farm or is it in another sector.

Fine Day

vikings2012 wrote: »

Hi there, I am part time farming at home with my father. He has 40 acres. Farm is too small for both of us to make a living off it. I have a full time job off farm. For the last year or so I am trying to grow the home farm but land availability is restricting me. I plan in the next 6 years to purchase my own farm (60-100 acres and hopefully within a suitable radius from the home farm). I have about 50k saved so far. Just wondering if you have any guidance for me in relation long term saving and long term planning for getting a loan. Any experience you might have would be greatly appreciated. I’m 24 living in Waterford.

Hi there. I don't want to be negative but 60 to 100 acres maybe in excess of 1 million pending on area & quality of land excess. Very difficult to finance such a large investment. Once you buy the land you need to buy stock etc & may also need to build sheds etc. I would hate to know what the repayments would be on a 1 million euro loan. But if you have the means to finance & the love for the land go for it as its normally a good investment

mycro2013

Theheff wrote: »

Hi there. I don't want to be negative but 60 to 100 acres maybe in excess of 1 million pending on area & quality of land excess. Very difficult to finance such a large investment. Once you buy the land you need to buy stock etc & may also need to build sheds etc. I would hate to know what the repayments would be on a 1 million euro loan. But if you have the means to finance & the love for the land go for it as its normally a good investment

You'd be looking at payments of 60k per year minimum outside of any other commitments

Fine Day

mycro2013 wrote: »

You'd be looking at payments of 100k per year minimum.

Take a serious income to fund that.

Donald Trump

vikings2012 wrote: »

Hi there, I am part time farming at home with my father. He has 40 acres. Farm is too small for both of us to make a living off it. I have a full time job off farm. For the last year or so I am trying to grow the home farm but land availability is restricting me. I plan in the next 6 years to purchase my own farm (60-100 acres and hopefully within a suitable radius from the home farm). I have about 50k saved so far. Just wondering if you have any guidance for me in relation long term saving and long term planning for getting a loan. Any experience you might have would be greatly appreciated. I’m 24 living in Waterford.

Fair play on having 50k saved at 24.


Do you have green cert i.e. are you qualified young farmer? If not, a fair chunk, if not all, of that 50k is going on stamp duty for the acreage you're talking about.

Fine Day

Donald Trump wrote: »

Fair play on having 50k saved at 24.


Do you have green cert i.e. are you qualified young farmer? If not, a fair chunk, if not all, of that 50k is going on stamp duty for the acreage you're talking about.

6% stamp duty on ag land, I think its classed as commercial property now. If you are under 35 & a qualified trained farmer you are exempt. A good account or ag advisor will advise on this.

kk.man

If u have the ability to save another 50k in the sane time period or less...I would consider moving on land of some sort. They don't make land anymore nor will it get any cheaper.

I know of a v large stud farm has now changed it policy of buying smaller plots. The thinking is a. Land rises in value b. The smaller plots could be used as a future swap c. Sale of this smaller plots could make a large purchase cheap in the future.

Donald Trump

kk.man wrote: »

If u have the ability to save another 50k in the sane time period or less...I would consider moving on land of some sort. They don't make land anymore nor will it get any cheaper.

I know of a v large stud farm has now changed it policy of buying smaller plots. The thinking is a. Land rises in value b. The smaller plots could be used as a future swap c. Sale of this smaller plots could make a large purchase cheap in the future.

The swapping thing is ok if you can get stamp duty relief for consolidation.
If you don't get that, you're probably needing a 9-10% rise in value to cover the stamp duty plus legal costs plus selling fees. (Although hopefully you make a bit working it in the intervening time)


As for land not getting any cheaper....wise men who thought that paid north of 50k an acre in these parts a decade ago for pure agricultural land with no hope value or potential hope value.

If it can't pay for itself by working it, then it's trading above it's intrinsic value and that differential is something which can (I'm not saying will) disappear quickly. You could see the shit hit the fan over the next year or two on Brexit and CAP reform and nobody will be splashing out their hard earned savings on land. Makes no difference if you are not going to sell, but if you have to sell, you might have no choice.

kk.man

Donald Trump wrote: »

The swapping thing is ok if you can get stamp duty relief for consolidation.
If you don't get that, you're probably needing a 9-10% rise in value to cover the stamp duty plus legal costs plus selling fees. (Although hopefully you make a bit working it in the intervening time)


As for land not getting any cheaper....wise men who thought that paid north of 50k an acre in these parts a decade ago for pure agricultural land with no hope value or potential hope value.

If it can't pay for itself by working it, then it's trading above it's intrinsic value and that differential is something which can (I'm not saying will) disappear quickly. You could see the shit hit the fan over the next year or two on Brexit and CAP reform and nobody will be splashing out their hard earned savings on land. Makes no difference if you are not going to sell, but if you have to sell, you might have no choice.

Tbf land around here is trading north of 10k and in the boom it was 20k. I think it's not bad value at that price. Brexit etc I can't see it falling.

Donald Trump

kk.man wrote: »

Tbf land around here is trading north of 10k and in the boom it was 20k. I think it's not bad value at that price. Brexit etc I can't see it falling.

I'd agree that 10k is probably fine. Given the current premium that people will attach to owning land. I wouldn't assume that will transfer through as strong to later generations though. I mean in terms of "sentimentality". That's not the right word but everyone here probably knows what I mean. Age profile of farmers is fairly high. I'd say that within a generation you'll have a much higher proportion of industrial-type farming, or at least large farms owned by agri-businesses.


Currently trying to buy a small bit myself. Would I buy it if I really sat down and did up the figures of investment vs. return as opposed to say putting it into some other type of property? Probably not. I'm also not going too mad on it so the current owner might not actually sell it now. They might need to sit on it there for another while yet. All up in the air at the minute!

Brexit might have effects we haven't considered yet. Indirect one being the removal of the UK contribution and the next phase of CAP being an easy target for cutting. Fellas not making money now apart from subsidies. Will take a bit of a shock and production levels falling perhaps to get that back to somewhat profitability on it's own. What will happen in the intervening years is anyone's guess.