40 and mortgage free

Dickie10

Hi, just looking for some advice on investing and growing my assets or money. i am 40 and have a house thats in very good condition mortgage free as it was an inheritance about 8 years ago. i farm 145 acres currently of which 30 acres are rented. i also work in a decent job which takes in around 40k per year, i have good holidays, lets say! The farm makes between 18-30k depending on my investments on machinery, fencing etc,on a given year which i try to do every second year or so to keep the place running well, of course the biggest driver of profitability is commodity prices of lamb and beef in a given year.

Over the past few years i have saved up around 50k in my own savings outside of the farm account that goes along and washes its face , there is always around minimum 15k to possibly 50k depending on livestock sales before restocking. I was planing on trying to save up to around 80k and look for a loan to buy land over the next 5 years, would 80k be enough deposit for banks to lend to a farm business, i was looking at around 200k of a loan, so i may spend around 250k which hopefully might get me around 20 -22 acres. i suppose i could go to 280k which should get that depending on myriad factors, location, land type etc. 20 acres of tillage land beside me sold for 230k about 4 months ago. my plan when i may buy is fence off two sites of 0.7 acres and put them on market without planning, in meath so was thinking 80k would be what a site of that size should make. i would be open to selling both sites to same person for 140k , usually a father will want two sites beside each other for sons or daughters, its quite common around here. i would rent the remaing 20-22 acres out for spuds /carrots , they are paying around 450/acre here for that. that should generate 9k a year on 20 acres. the plan might be to take back the land after 6-8 years or keep it going that way and sell at 65 as a pension pot.

at least i would have something to show for the savings. my question is, how much would repayments per year be on 220,000 loan per year? would around 10k be close to covering it? the sale of two sites to generate 140,000 would put a nice hole in it too if it came to pass. any advice on this plan?

batistuta9

who'd buy a site without planning? don't they then risk not getting planning granted

893bet

https://www.boards.ie/discussion/2058369609/40-and-mortgage-free

There won’t be too many places where there is 20 acres of prime land suitable for spuds that had road frontage with sites selling for 70k. For 10k an acre.

Dickie10

they would buy subject to planning, local needs. they apply for planning then if they get it they pay, all done through a solictor of course. its still very popular among people who were reared int the countryside to want to build the big dream home in the country, there are plenty that will pay top dollar for it because its so scarce to get a site, the next generation of young people have no access to sites unless born on a farm.

i researched this and notice a lot of men who are 55-70 who were born on farms but didnt inherit the farm but built a house on the farm land in 1980s early 90s, these people have now no access to land for their children to build a house on just like they did. these are the people i think may be attracted to buying site to build on. a lot of their children in there late 20s and 30s would have grown up in a bungalow type house in country on a half acre site and some dont want a house in an estate.

the pool of farm families is getting less then halved each generation i would think or evn less than that.

Dickie10

ill have to see how it pans out. 230,000 got 20 acres back in may beside me, with a lot of road frontage within 35 minles of dublin city.

Dickie10

would 12-14k an acre be more realistic? if you can sell the sites its surely doable? really just wondering what repayments would be like on 220-250k loan per year?

Padre_Pio

https://www.boards.ie/discussion/comment/122631931#Comment_122631931

Honestly if it was that easy then every farmer would build roads through their fields, divide them up and become multi millionaires overnight.

Every site I see has a "subject to planning" clause. Of course it depends where you are in the country, but I have a good friend whose father bought 2 acres near the home house 30 mins north of Dublin with a view to build three houses for his sons. Flat out rejected and now two sons bought in a nearby estate.

Dickie10

yea county dublin is gone very hard to get planning. all subject to planning for local needs only. helps too if you have a few contacts on councils or politics.

cute geoge

Why did you let the farm near you sell for 230k ,when you have 50k sitting idle and assets of 1m ,I would say you missed the boat why would you bother your whole selling sites anyway destroying a farm

Dickie10

well thats why im on here asking questions! that was just a 20 acre field not a farm. i want to see how the land market plays while saving a bit more. im thinking dairy prices are going to be steadily eroded over the next 10 years because the corporations have the milk tap flowing at a huge pace since quotas went so farmers will have to still sell milk and it may become a race to the bottom, this may take the heat out of the market with some dairy farmers gone. tillage is already dead in the water and will be even more once CAP reforms on payments come in, thats another player gone, but land rental prices will also suffer then thats the catch 22. i may be able to meet repayments but i thought a site or two sold off land block of 25 acres would leave repaying the loan very easy and still be left with 23+ acres. it wouldnt bother me selling sites off the corner of the field once its a bit away from my home farm, it definitley wouldnt destroy a farm.