Land Rental Insights - Part 1: Landowner Views

9 February '13

We knew we would get the chance to connect with some landowners at the Canadian International Farm Show but even we weren't braced for how many we would encounter. The number of landowners vs. farm operators was about a 30%, 70% split - which was a pleasant surprise. The feedback from these landowners was very valuable. Here's what we learned from them: 
1)  With few exceptions, almost all landowners expressed uncertainty about what their land was worth in terms of rental rates. Many started out by asking 'what's the going rental rate for land in my area?', the answer to which, of course, depends upon so many factors (location, soil type, drainage, soil nutrition, commodity prices etc.). The bottom line was, landowners on the whole did not feel informed enough about what price was 'fair' and in almost every case - this was a big factor. The rental income generated from leasing one's land matters to landowners, and they want to make sure their rental rates reflect their asset's worth. 
2) That said, it was very clear, that money was not the only consideration for landowners. For some, money was the biggest factor, and for almost all, it was a significant factor - but for most, other aspects factored into their priorities. It is clear, that landowner's individual values are reflected in what they value most in a tenant. Some landowners specified a heartfelt interest in the sustainability of farming in future generations, and felt they would favour a younger/emerging farmer, even at a somewhat lower rental price. For many, how the land was treated was on par with rental income. In fact, several landowners expressed regret over past decisions to award leases based on the highest price alone, admitting they had paid for that decision with diminished soil quality and overall value of their asset. Environmental stewardship was another big factor, as well as a preference towards certain philosophies on chemical and nutrient management practices. One farmer even placed a high priority on whether or not a tenant farmer was known to keep his rows straight! As we learned - the decision matrix for landowners is clearly not driven by price alone, news which may come as a relief to many of the farmers out there who find themselves unable to compete as competitively when it comes to price (we will touch more on this in Part 2 - Farmer's Views to be posted soon).  
3) Many landowners described the social awkwardness and interpersonal stress of being 'caught in the middle' of different farmers who wanted to rent their land. It is uncomfortable when a landowner feels they are renting out their land too cheaply and don't know how to ask for more, and it's awkward when approached by someone willing to pay more - especially when this turns into an upbidding scenario where all eyes look to the landowner to make the decision. It is often hard to say 'no', and with so much demand for rental land, landowners don't like having to make these tough calls under pressure. 
4) Related to the pressure of making a decision, is the fact that most methods of advertising land for rent involve a lot of phone calls, emails, and knocks on the door, coming at all times of the day and evening, and at times causing disruption to the landowner's home routine. Landowners expressed a preference for a procedure that gave them an arm's length of space - to assess the offers on their land, and choose the one that suits their needs without any 'in-your-face' pressure. Some landowners described farmers as being very demanding and looking for a quick close to a deal, and if given the option, landowners prefer the time and space to make the right decision.  
Hearing these insights was both helpful and encouraging to the Rentthisland.com team - helpful in the sense that our goal is to offer a service that addresses the predominant needs of both landowners and farmers - and encouraging in the sense that landowners genuinely seemed excited about having Rentthisland.com as a resource. Of course, we'd be thrilled if this translated instantly into a bunch of listings on the site, but many of the landowners we met aren't in the position of having land for rent at this moment in time. That said, we are hopeful that if we continue to spread the word, before long many will take advantage of what we have to offer, and this can add great benefit to the farmers out there too! Be sure to check out Part 2 of this blog post, 'Land Rental Insights - Farmer Views' for more information.
 



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