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Farm Business
Tenant Farming, Subsidies, BPS & Legal Issues
AHA Rents, DFRA “Farming is Changing” and "No Deal" Brexit
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<blockquote data-quote="Austin7" data-source="post: 6528234" data-attributes="member: 42100"><p>Is this in the context of an AHA86 tenancy? If so am I hearing you correctly? You are prepared, by knowingly paying an excessive rent, to give away your capital to your Landlord purely on the basis that you don’t want to hurt his feelings and then once he has all your capital you would walk away and leave him your farm?</p><p></p><p>Of course, it may be that you are already on a low rent. If not I have a better plan. In a quiet and civilised way you should seek a September 2020 review. If your current AHA rent is say £80 per acre then I would suggest there is plenty of room on the downside whatever our new PM comes up with on 31stOctober. If you have another generation on the AHA tenancy or you are a young man yourself the farm as an investment is worth no more than 1.5% return so £5,333 per acre at £80 rent. If the rent drops to £60 it is worth £4,000 per acre. The difference between the investment value and the open market value is the Tenants Equity and the Marriage Value. Here lies the reason that Institutional landlords are running for cover and selling their tenanted farms as best they can. So, rather than paying too much rent and walking away, get your head around the possibility that this could be your opportunity to buy the farm.</p></blockquote><p></p>
[QUOTE="Austin7, post: 6528234, member: 42100"] Is this in the context of an AHA86 tenancy? If so am I hearing you correctly? You are prepared, by knowingly paying an excessive rent, to give away your capital to your Landlord purely on the basis that you don’t want to hurt his feelings and then once he has all your capital you would walk away and leave him your farm? Of course, it may be that you are already on a low rent. If not I have a better plan. In a quiet and civilised way you should seek a September 2020 review. If your current AHA rent is say £80 per acre then I would suggest there is plenty of room on the downside whatever our new PM comes up with on 31stOctober. If you have another generation on the AHA tenancy or you are a young man yourself the farm as an investment is worth no more than 1.5% return so £5,333 per acre at £80 rent. If the rent drops to £60 it is worth £4,000 per acre. The difference between the investment value and the open market value is the Tenants Equity and the Marriage Value. Here lies the reason that Institutional landlords are running for cover and selling their tenanted farms as best they can. So, rather than paying too much rent and walking away, get your head around the possibility that this could be your opportunity to buy the farm. [/QUOTE]
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Farm Business
Tenant Farming, Subsidies, BPS & Legal Issues
AHA Rents, DFRA “Farming is Changing” and "No Deal" Brexit
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