Payback time?

[SilliamWhale]

What do you try to pitch as payback times for your business investments?

So for example just out of interest how long would you expect to pay off the following?

150hp tractor
Combine
Grain store
Milking Parlour
Workshop shed
House
Barn Conversion
Land

I'd be interested to hear how different the replies are if at all.

Personally I'd always be thinking 3 years for a tractor, 4 years for a combine, 8-10 years grain store, 15-20 Barn conversion, 20-25 House. Land don't think I could pay it back!!!

 

[Werzle]

Doing well to pay off a modern combine in 4 yrs

 

[Greythundercloudys]

A life time.

 

[D14]

What do you try to pitch as payback times for your business investments?

So for example just out of interest how long would you expect to pay off the following?

150hp tractor
Combine
Grain store
Milking Parlour
Workshop shed
House
Barn Conversion
Land

I'd be interested to hear how different the replies are if at all.

Personally I'd always be thinking 3 years for a tractor, 4 years for a combine, 8-10 years grain store, 15-20 Barn conversion, 20-25 House. Land don't think I could pay it back!!!

Machinery 3-6 years depending on the value initially. A £350,000 combine will take a while!

Any sheds we’ve done on 8-10 years depending on its use. If it’s for a commercial let them halve it and dump all the rent back in against it.

House purchase standard 25 years.

Barn conversion build costs out of cash reserves as it’s not massive amount if done over 3 years. If you want to do it quickly for a sale then get a bridging loan.

Land ! Anybody buying land without cash reserves has got to be doing long term mortgages as there’s no other way.

 

[Bramble]

Depends on profitability at any given time.

Have bought houses and land out of cash flow in the past, but also had 10k machines on finance due to cash shortage.

Otherwise probably not far off the OP figures

 

[Drillman]

Any machinery 3 years max or do without/buy something that can be done in 3 year or under.

Buildings write the cheque or forget it.

Never bought land never had a mortgage.

 

[Blue.]

What do you try to pitch as payback times for your business investments?

So for example just out of interest how long would you expect to pay off the following?

150hp tractor
Combine
Grain store
Milking Parlour
Workshop shed
House
Barn Conversion
Land

I'd be interested to hear how different the replies are if at all.

Personally I'd always be thinking 3 years for a tractor, 4 years for a combine, 8-10 years grain store, 15-20 Barn conversion, 20-25 House. Land don't think I could pay it back!!!

Tractor would only be 3 years if 0% otherwise I just buy outright
Milking parlour was done out of cash flow same as cubicles,silage clamp,lagoon etc generally spend £50k of so a year on such projects.
Last house was 15 years but did put half down on it.
Barn conversion looking at 12-15 years
Land 25 years

 

[willy]

I normally do 5 years for machinery, combine maybe a bit longer now.

you need a level of reinvestment every year, or you have a massive amount one day. I work on a approx £35-40 per ha per year on machinery repacement costs per year.

 

[willy]

i

 

[Martin Holden]

What do you try to pitch as payback times for your business investments?

So for example just out of interest how long would you expect to pay off the following?

150hp tractor
Combine
Grain store
Milking Parlour
Workshop shed
House
Barn Conversion
Land

I'd be interested to hear how different the replies are if at all.

Personally I'd always be thinking 3 years for a tractor, 4 years for a combine, 8-10 years grain store, 15-20 Barn conversion, 20-25 House. Land don't think I could pay it back!!!

I’m not a farmer but those periods sound very ambitious to me. I would have guessed 7/8 years for combine 5/6 years tractor, 25/30 years grain store and 20-25 years for barn conversion (if letting it). If these figures are incorrect I must be way out of touch.

 

[icanshootwell]

You would be amazed what time period people have kit over.
I heard through a dealer that one farmer had a round baler over 7 years!!
Cost of 150hp tractors now are 80 to 100k, most cant do that over 3 years, payments are punishing.
Personally if i cant buy a tractor over 3 years i don,t bother, most kit is over 2 years, combine dont get changed, i love the old girl to much. Last building i put up was over 20 years which i regret, 15 would of been better.

 

[Northeastfarmer]

You would be amazed what time period people have kit over.
I heard through a dealer that one farmer had a round baler over 7 years!!
Cost of 150hp tractors now are 80 to 100k, most cant do that over 3 years, payments are punishing.
Personally if i cant buy a tractor over 3 years i don,t bother, most kit is over 2 years, combine dont get changed, i love the old girl to much. Last building i put up was over 20 years which i regret, 15 would of been better.

The price round balers are now they need to be over 7 years!

 

[icanshootwell]

The price round balers are now they need to be over 7 years!

It makes them very expensive then, over 7, cost of credit. I,m sure a contractor would work out cheaper.

 

[Northeastfarmer]

It makes them very expensive then, over 7, cost of credit. I,m sure a contractor would work out cheaper.

I got mine over 3 years but only because it was 0% finance

 

[Sid]

I would have said any borrowings should be based on maximum 50% of life of item?
So tractor going to keep for 6 years 3 years?
Buildings life span 30 years so 15 years
Land your life time 40-50 years so 20-30 years?
Quicker it's done the better, My house was done over 12 years.
Just my thoughts.

 

[J 1177]

Last tractor was on 4years, current one on 5, more money.
Baler was on 4. Now paid for
Mortgage (thankfully paid off last sept) 20years.
Pickup was on 5 (as five year warranty, was buying from scratch) 6 months left on that.
Shed well I have not put one up yet but I'm weighing up putting a small one up paid for over five years or a massive (by my standards) over 8 to ten years.
I think in the long run the big one will be cheapest.

 

[Bill the Bass]

A barn conversion for example is very variable. If you were just letting on an AST it will take along time to pay off but letting as a holiday let in a prime holidaying area might be more cash generative and faster payback. Property - location, location, location I guess.

 

[Kiwi Pete]

Not sure about the rest, we are paying off our land over 20 (15) years, though
My 150hp is split into two tractors and everything else is either owned or paid for on 30 day term

 

[Tarw Coch]

I work on the basis that the one I’ve got pays for the replacement.
So if I cant afford a new one I won’t be having one.

 

[willy]

I do wonder if there is a financial model for rebuilding older models I.e. jd 8530 era stuff, has enough technology but without too many unnecessary components.

total rebuild sort of thing.possibly more tax efficient aswell