What's happening in real estate
What's happening in real estate

Future of Farm Ownership - August 2020

Property Brokers  Thursday, August 20th
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Ownership models for farming, in the way of equity partnerships is something I am very passionate about and  something I have touched on before in a previous article “Changing Times”, I believe it is going to be very instrumental in helping good farming operators get into farm ownership and have some serious skin in the game.
 
I think we can all agree that unfortunately the days of shearing sheep to work your way into a farm are behind us, a previous option that was highly successful for some motivated individuals.
 
The make up of equity partners to form an entity to purchase a property and farm as partnership can take many different shapes in relation to number of shareholders and percentage held etc. One key component is that you need to have two different types of investors. On one side we have our Operations manager, who is the hands-on farmer in the equation and responsible for the day to day running of the business., there would be only one of these type of investors in each setup. On the other side of the equation we have our high net worth investors, which I believe needs to consist of a minimum of two.
 
A couple of the key things to help make this type of ownership model work is:
  • All parties must be able to get on, I believe it is as simple as sitting down and having a beer together, if you can't enjoy each other's company over a beer, you probably are not the right mix

  • Exit strategy, there must be a clear and defined pathway for individuals to be able to exit the partnership, as peoples plans do and will change.
 
This model of farm ownership can and will benefit and offer more options a wide range of people, from land owners looking to sell and move off the land but would like to retain some equity in the farm, to a beneficiary of a family farm succession plan who to make it a viable option needs some outside equity.
 
Over the next few weeks, I will be holding some meetings and presenting a model I have been working on to make this option of farm ownership a reality. If you would like to be attend one of these meetings please get in touch.
 
For all your rural real-estate requirements, whether buying or selling any type of rural land large or small please get in touch.
 
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