Mortgage rate direction?

[mbratrud]

The 5 yr rates are appealing, but a 10 year at 3.4 sure offers security for a long time.

[blackpowder]

$1285 per acre debt and $1666 per acre debt seems like a banker might be asleep at the wheel?

In your opinion what is an acceptable debt/acre or debt/equity ratio?

Your banker would be happy to share those ratios. Those numbers would possibly fly here.

[tweety]

$1285 per acre debt and $1666 per acre debt seems like a banker might be asleep at the wheel?

In your opinion what is an acceptable debt/acre or debt/equity ratio?

Those things like debt/equity, ROI etc don't matter in farming.

[farmaholic]

There is no doubt that I have missed the cheapest time to borrow money in my farming career.

Nothing like lazy capital. Land cost inflation/appreciation has taken a bite out of any resources kept to purchase new land.

If the right opportunity presents itself maybe its not too late..... other than being alot more expensive to purchase the asset(it's cost).

Schtoopit.....

[farmaholic]

Why are u saving ??

Better to borrow than to save !

A kid with zero savings paid 525,000 / quarter this past spring !

He says he has nothing to loose !

For:

The right stuff
The right place
The right time

Otherwise. I don't care.

The next land I buy might only be a burial plot and then maybe not.

On a per acre basis burial plots are very very expensive....lol.

Take care wiseguy.

[Horse]

Why are you saving.. Because there comes a time you cant do or dont want all that work,then you become that hated species,,,,the LANDLORD.
Nice to finaly have a bit of a bankroll in your pocket,instead of a mortage that needs paid.

[Richard5]

$1285 per acre debt and $1666 per acre debt seems like a banker might be asleep at the wheel?

In your opinion what is an acceptable debt/acre or debt/equity ratio?

This is what is on my corporate financial statement package.

Working capital ratio - At least 50%.

Target goal of debt to equity would be less than 40%

% owners equity - greater than 70%

I think all of these measurements depend somewhat on ones age and level of comfort. My accountant tells me that he has a number of clients that farm 1500-3500 acres that consistently put up accrued net income earnings of $125-175 per acre and 8000-10000 acre farms that can't get close to that. That being said, accountant also claims they work with large farms that manage the business very well and profit margins are consistent or even better proving the economies of scale debate.

Size doesn't always matter, its all management which is a broad term. Imo, its a slippery slope with every increasing technology and sales pitch to drive the latest and the best. Many farms don't have enough annual earnings to support the spending. Its only a matter of time before more and more fall.

[burnt]

For:

The right stuff
The right place
The right time

Otherwise. I don't care.

The next land I buy might only be a burial plot and then maybe not.

On a per acre basis burial plots are very very expensive....lol.

Take care wiseguy.

Very, very expensive, but you have to acknowledge that it is, relatively speaking, a lasting investment...

And one that you will never see depreciate.

And that's a fact.

[farmaholic]

Very, very expensive, but you have to acknowledge that it is, relatively speaking, a lasting investment...

And one that you will never see depreciate.

And that's a fact.

With all due respect, I bought land in 1986 and prices fell. Bought land like it in 2004 for same price.
18 years, for many of those years I wouldn't have been able to sell it for what I paid. Something tells me we might be there again.

Timing and time better be on your side with a farmland purchase in the past AND now.

[burnt]

With all due respect, I bought land in 1986 and prices fell. Bought land like it in 2004 for same price.
18 years, for many of those years I wouldn't have been able to sell it for what I paid. Something tells me we might be there again.

Timing and time better be on your side with a farmland purchase in the past AND now.

The reference being directed to your burial plot cost -

[farmaholic]

The reference being directed to your burial plot cost -

LMFAO, now it's funny.

[AlbertaFarmer5]

The reference being directed to your burial plot cost -

Not o sure about your depreciation comment. Have you ever tried to buy or sell a preowned/used burial plot? Apparently evicting the tenant is frowned upon. Although they did it in Paris and filled the catacombs with the previous tenants.