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| Have seen a couple of these. Tenant pays all expenses except property taxes,gets all gov't payments, sells and gets all grain sale proceeds, pays a guaranteed 50-100 per acre cash rent, 1/2 Mar 1 and 1/2 Dec 1. Tenant makes a simple income statement of revenues less all cash expenses including drying expense,repairs, fuel, crop insurances, liability ins for that parcel, and deducts the cash rent guarantee and what ever the net is, they split 50-50. Final payment is due 10 days after final grain settlement is recieved. This gives the LL a guaranteed minimum he can always count on plus the opportunity to share in a good year, yet doesn't have to mess with paying expenses, gov't red tape or marketing. Tenant gets a break in a bad year. It takes all price, cost and weather variables into account. Has worked well for the people involved, just akes a little bookkeeping and preparing a report for the landlord. This way he also knows you're not getting rich at his expense. Some also show a machinery cost of 25-35 per acre so the LL knows how much the tenant is netting. | |
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Variable cash rent
