Cost To Lease Farmland

[Joe Walshe]

My wife and I are considering leasing out about 50 rai of our very good farmland in Loei. We wondered what is normally charged for a 1 year lease. We would be leasing to other people (not leasing from others). The land cost about 1.5m baht.

There is a natural spring on the land. the last crop was corn.

Our plan is to plant trees around the boundaries for now with maybe some trees in groups within the farm. By leasing out the land we would effectively have someone keep brush, weeds etc. from taking over. Any advice or opinions welcome.

[Khonwan]

My wife and I are considering leasing out about 50 rai of our very good farmland in Loei. We wondered what is normally charged for a 1 year lease. We would be leasing to other people (not leasing from others). The land cost about 1.5m baht.

There is a natural spring on the land. the last crop was corn.

Our plan is to plant trees around the boundaries for now with maybe some trees in groups within the farm. By leasing out the land we would effectively have someone keep brush, weeds etc. from taking over. Any advice or opinions welcome.

Hi Joe

My land is valued at only a third of yours and would easily fetch 650/700 baht per rai this year (it was 600 baht last year). I guess it could command twice that since the current price of cassava and maize could support this and since, in consequence, there is very little land being made available for rent this year. I don’t think the rent shall vary too much with any regard to the real value since the costs and returns of cropping are going to be the same regardless. You should, of course, get a much better idea from asking around your own district. Try for 1,500 baht per rai – the tenant farmer should still make a reasonable profit and provide you with an initial yield of 5% on your purchase cost. The full annual rental is always paid in advance.

Rgds

Khonwan

[slapout]

We rented out some farmland for 4 years as we did not want family farming it etc. we recieved 1000/ rai per year. Advance payment recieved, and renter took care of land good. Poor health of renter brought this arrangement to a halt. Next potential renter did not want to pay up front so we took it back into family circle. It is good land for rice and vegs. etc but is dependent of rain and govt water. We could possibly have gotten more rent but I was more concerned about keeping it in good shape until we could work it into family farm.

[Joe Walshe]

I would agree with you Slapout, better to keep land in good shape than rent to anybody.

What I am starting to think now is;

Is it better to rent farmland for 'hobby farming' than buy land if rents are that low.

For example, you retire to Isarn at 60. Rent until you expire, that could be 1 to 20 years. 20 rai at 1,000 per rai per year for 20 years is 400,000 baht. I realise there are other considerations ie inflation. A lot cheaper than owning it.

Then again you may only want to farm for a few years. Your capital stays off shore invested somewhere else.

Just a notion.

I can see advantages and dis-advantages.

Joe

[fruity]

Joe, Renting out land in Issan is hardly to be considered 'an investment' proposition for ones retirement:).....In our area, rent is always paid for in rice, usually the tennant hands over 20% of their crop or the value of to the landowner. Very few people can afford to pay rent in advance, many pay a bond, but not the full amount, unless you rent to big sugar cane growers who will pay in advance, often for three years in advance! Maybe worth looking into if there are any growers in your area?

[Joe Walshe]

Joe, Renting out land in Issan is hardly to be considered 'an investment' proposition for ones retirement:).....In our area, rent is always paid for in rice, usually the tennant hands over 20% of their crop or the value of to the landowner. Very few people can afford to pay rent in advance, many pay a bond, but not the full amount, unless you rent to big sugar cane growers who will pay in advance, often for three years in advance! Maybe worth looking into if there are any growers in your area?

Perhaps I did not make myself clear. My wife and I are considering letting others rent or land to grow chili, corn or something like that while our trees grow to maturity. The aim being to have someone take care of the land and trees while they are growing their crops, and maybe provide security. I was surprised when my wife said that land could be rented at between 500 and 1,000 baht per rai per year. this made me think, why bother buying land for hobby farming when you could rent it on a yearly basis until you then retire from farming yourself. I myself am attracted to the idea of owning and developing the land with fruit, teak trees etc.

But considering the low rents it seems it could be an option for some to rent a few rai to grow vegtables, fruit etc. ratrher than buy it outright.

The purpose of the original post was to get an idea of land rents around Isarn.

[uptou]

Edited January 22, 2008 by uptou

[uptou]

Sorry to distract from the op,but what sort of price would/should you be paying rent wise for only 1 rai of farming land for the hobby type farmer?Or is this hard to come by?