ABSENTEE OWNERS
SHOULD ABSENTEE OWNERS EMPLOY
FARM MANAGERS OR LEASE
As the benefits of farm ownership become increasingly apparent, more and more investors, both individual and institutional, compete for prime farmland. There are few, if any, other investments available today that offers both appreciation of land values and income sheltered by depreciation. In addition, the outlook for agriculture remains bright as demand for farm products continue to increase. But as attractive as an investment in farming operations appear, there are pitfalls that the investor must consider. In addition to soil, water and climate conditions, the operator must possess four other essential elements – adequate capital, good management, operational skills and a market for his product. The key to the success of the operation is, or course, good management. That skill will determine if all the other requirements are met.
In most cases, the investor does not possess all of the skills necessary to make the farming venture a success. The answer, then, lies in one of two options. 1) employ a farm manager to supervise the day to day operation or 2) lease the property to an experienced farmer. In both cases, it is absolutely essential that the right choice is made. The Farm Manager must follow sound cultural practices, maintain adequate records, conform to all legal requirements, control expenses and provide detailed reports to the investor. A lessee must have a verifiable reputation as a successful operator that will care for the farm in such a way that the condition of the property is not adversely affected and whose honesty and integrity is above reproach.
A crucial aspect of farm investments is the proper application of current tax laws. We work closely with tax professionals to recommend the techniques to minimize or defer taxes.h
1st Western’s farm managers enjoy excellent reputations as outstanding operators that meet all of the above requirements. In addition, we work with many successful farmers that are looking for farmland to lease. Contact us at 559-225-5915 or visit our website:
http://www.1stwesterngroup.com.
to learn more about both of these options.
