The way you communicate with your landlords is critical. A strained, or nonexistent relationship could reduce your chances of keeping land, negotiating lower rent or getting buy in for land improvement.
“In a recent survey, we learned that landowners care more about experience and reputation of a farmer than a rent payment,” says Mykel Taylor, with Kansas State University. “Financial was the last concern. These results are almost opposite of what most farmers assume.”
There is a right and a wrong way to approach your landlord. Learn how to identify what kind of communication they prefer, how to approach tough conversations and what your landlord is thinking when selecting tenants.
“When both parties view this relationship as a collaboration those are the relationships that flourish,” says Doug Hensley, president of Hertz Real Estate Services. “Listen first and be responsive to what is important to the landowner.”
When you understand what the landowner cares about and expects, you can make sure you’re meeting their needs.
“You want to be cognizant of how much interaction landlords want,” Taylor says. “Farmers should ask landlords, when they first sign a contract, how often they want me to communicate with them. I also recommend asking what kind of communication they prefer—letter, phone calls, texts with pictures. The average landowner is in their 70s, so their communication preferences might be different than a farmer in their 30s.”
Customize your communication with each landlord—if you’re able. Take note of what they’d like from you and they’ll feel like they’re included in what’s happening to their land, which only improves your reputation in their mind.
“The more a farm operator makes things personal the more successful they’ll be long-term,” Hensley says.
However, if you have a large number of landlords it might be hard to cater your approach individually—so get creative.
“I had a tenant in eastern Kansas who has over 90 landlords, so he put together a newsletter to update everyone,” Taylor says. “Another uses Facebook.”
How to handle awkward conversations.
In a year of tight profit margins, it might mean you need to ask your landlord for a rental rate reduction. That can be a difficult and unnerving conversation—take steps to be prepared.
It starts with being open—if you’re hoping to reduce your rental rates or want to share costs on something such as tile, your landlord needs to understand the big picture. You don’t have to share everything, but you can share certain details that will help inform your landlord.
You need to explain the situation at hand to landlords, Taylor says. “Show the correlation between cash rent and expected revenue. Show how prices have dropped over the past three years and how that means revenue has dropped. That’s the info to share that will help you negotiate.”
Be honest in the good—and the bad—years. When profit opportunities are more likely, she suggests negotiating for a higher, but fair, rent. Then, when prices are low, your landlord might be more willing to come down on price.
“I also think it helps to adjust leases year by year,” Taylor says. It protects the tenant and the landowner in case of major price shifts.
Think like a landlord.
“Landlords want to be proud of their farm,” says Jeff Troendle, president of the farm management business at Hertz. “Their objectives aren’t always monetary. Some are more concerned about conservation, for example.”
Land is an investment and an income source for landowners. They want to make sure it’s well cared for and will continue to provide for their families. Help them understand the efforts you’re making on their farm, and why it benefits them.
“Anytime you have a reason to meet that owner or have them ride with you in the combine or planter—do it,” Troendle says. “It gives you the opportunity to talk openly in an environment that is low pressure.”