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[ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] Farmland lease option Posted by Bill H on August 17, 2006 at 3:20 PM In Reply to: Farmland lease option posted by Sara_CA on August 17, 2006 at 2:15 PM : Thanks to all for your thoughts. : I am uncomfortable making the second mortgage for my buyer now. What about lease option? I get some rent and option money, until he can finance with a bank? : : What do I need to look out for here? I want to get rid of the farmland. : I know I need to: : 1. Make two agreements. One for lease, one for option to buy. : 2. If he is one day late with payments, option contract is canceled. Money not refundable. : 3. Must leave property in a clean condition if he does not buy. : 4. Price of purchase is determined by future apraisal value. : What else? Are there any disaster lease option stories you don't mind to share? : Thanks again. Thanks you for this forum. Sara: Why not do a straight option to purchase. You get XXX dollars each year for the option. He gets the right to renew each year for XXX dollars. He gets the right to farm the land and agrees to leave in good condition, etc. You both agree on YYY purchase price up front...like now. You may or may not apply part of the money to the purchase price. If he fails to renew within a certain time limit of the time to renew..the option is dead. Last time I checked option money is not taxable until the option is either executed and he pays you off or it expires and he walks. So you have non taxable income for the term of the option or he lets it expire. Get a good attorney to put this together for you and you should be OK. Good Luck, Bill H Follow Ups: Post a Followup: Name : E-Mail : Subject : Comments: : : Thanks to all for your thoughts. : : I am uncomfortable making the second mortgage for my buyer now. What about lease option? I get some rent and option money, until he can finance with a bank? : : : : What do I need to look out for here? I want to get rid of the farmland. : : I know I need to: : : 1. Make two agreements. One for lease, one for option to buy. : : 2. If he is one day late with payments, option contract is canceled. Money not refundable. : : 3. Must leave property in a clean condition if he does not buy. : : 4. Price of purchase is determined by future apraisal value. : : What else? Are there any disaster lease option stories you don't mind to share? : : Thanks again. Thanks you for this forum. : Sara: : Why not do a straight option to purchase. : You get XXX dollars each year for the option. : He gets the right to renew each year for XXX dollars. : He gets the right to farm the land and agrees to leave in good condition, etc. : You both agree on YYY purchase price up front...like now. : You may or may not apply part of the money to the purchase price. : If he fails to renew within a certain time limit of the time to renew..the option is dead. : Last time I checked option money is not taxable until the option is either executed and he pays you off or it expires and he walks. So you have non taxable income for the term of the option or he lets it expire. : Get a good attorney to put this together for you and you should be OK. : Good Luck, : Bill H : Optional Link URL: Link Title: Optional Image URL: [ Follow Ups ] [ Post Followup ] [ The Forum Board ] [ FAQ ] WWWAdmin 2.0a © 1997 Matt Wright and DBasics Software Company, All Rights Reserved

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