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Tenants, landlords search for right balance

Farmland rental rates will be under the microscope over the next few months.

Nebraska Extension educator Allan Vyhnalek says, in many cases, there’s a considerable gap between what landlords think they need for rent and what tenants think they can afford to pay.

On the landlord side, Vyhnalek says, taxes are a big concern.

“Land taxes keep going up and they’re worried about that,” he says, “They’re asking ‘how am I going to cover land taxes with the lease arrangements I’ve got’.”

For the tenant, Vyhnalek says, profit margins are tight or nonexistent. But he says many renters are hesitant to let the land go.

“Most tenants are afraid to give up rent,” he says. “They still pay rent that’s probably too high, mostly because they know that—as the old story goes—if you turn it down at 10:00 in the morning, the landlord will have three people there making offers by 5:00 p.m. the same day.

“So it’s a real balancing act there to figure out what you should pay, yet hold that land resource and keep your base up.”

Vyhnalek says there is more interest in alternative cash lease arrangements with flexible provisions for different situations.

Vyhnalek and his Extension colleagues have been conducting Landlord/Tenant Lease Workshops this month across Nebraska.

AUDIO: Alan Vyhnalek