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Rented land - sale value?

Discussion in 'Agricultural Matters' started by King Rollo, Oct 11, 2017.

  1. King Rollo

    King Rollo New Member

    Location:
    Strathclyde
    I have a small area of ground which I have rented out for a
    number of years. This land has been used to run a business
    on, not for agricultural purposes.

    The tenant has asked me about the possibility of purchasing
    the land. I'm wondering if there is a rule of thumb or
    suchlike for how many years rental value the sale price
    should be based on.

    I know there is no 'correct answer' to the question of land
    value, but it would be good to have a starting point for
    negotiations.



    Any ideas? :scratchhead:
     
  2. chipchap

    chipchap Member

    Location:
    South Shropshire
    Ask the guy to put a figure on the table; he has approached you after all.
     
  3. King Rollo

    King Rollo New Member

    Location:
    Strathclyde
    Sure I'll do that, but that will be his figure - I need to know what my figure will be. I expect his figure will be lower...
     
  4. Goweresque

    Goweresque Member

    Location:
    North Wilts
    Unless you need the money for something else, I wouldn't sell it for less than the market price without a tenant, even if he has security of tenure of some kind (which he may not, as its not an agricultural business). Small plots of land are valuable, there's always a decent trade in them, and will continue to be as the population expands and gets wealthier over time. Unless you have another surefire investment lined up that would bring in more income than the rent on this bit does, keep hold of it. Money in the bank gets you SFA these days.
     
  5. SRRC

    SRRC Member

    Location:
    West Somerset
    No rule of thumb, just by negotiation.
     
    King Rollo likes this.
  6. quattro

    quattro Member

    Location:
    scotland
    Be better asking what he thinks it's worth
    Might surprise you!!
     
  7. nick...

    nick... Member

    Location:
    south norfolk
    It's worth less tenanted than it would be without a tenant.
    Nick...
     
  8. Goweresque

    Goweresque Member

    Location:
    North Wilts
    If you're the person proposing selling yes, but the OP is being asked to sell, thats a different position.
     
    spin cycle likes this.
  9. Courier

    Courier Member

    Depends so much whether or not the tenancy is from year to year or something more permanent.

    Test the market by putting up a For Sale sign and your telephone number.

    Not unusual for sale value to be 200 to 400 years (or more) rent but they are in completely different markets.

    A full blown Ag. Tenancy will reduce the land's value by 2/3.
     
  10. chipchap

    chipchap Member

    Location:
    South Shropshire
    So, you're going to ask him his figure, and what ever it is will not be enough?
     
    Nearly likes this.
  11. Nearly

    Nearly Member

    Location:
    YO7
    It's business.

    Garden £100k an acre
    Tree surgeon yard same.

    Price up a quality carpet per m2 and you'll be longer wearing a meter of land out. ;)
     
    Grassman, Danllan and chipchap like this.
  12. Danllan

    Danllan Member

    Even at just £10 per square meter it would be over £40k; take a squint at the John Lewis website and start planning your retirement...
     
    Grassman likes this.
  13. Nearly

    Nearly Member

    Location:
    YO7
    Already working on it.
    That's my favourite line to justify my asking price to householders. ;)
     
    Danllan likes this.
  14. Lazy Sod

    Lazy Sod Member

    Location:
    Wiltshire
    Don't forget Capital Gains Tax.
     
    King Rollo likes this.
  15. King Rollo

    King Rollo New Member

    Location:
    Strathclyde

    I had my tongue in my cheek typing that...

    Thanks for the replies.
     
    chipchap likes this.
  16. Dry Rot

    Dry Rot Member

    Location:
    Scotland
    An idea, but it won't be accurate!

    https://investmentproperty.co.uk/property-investment-calculators/years-purchase-single-rate/
     

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