Whether it is a farm building or livestock facility, farmers who want to put unused space into service to generate additional farm income first need to know how to go about creating a leasing arrangement and how to determine an appropriate rental price, says David Marrison, an Ohio State University Extension educator.

"Many farmers may want to rent out buildings on their properties, but sometimes it's hard to put a number on that, so it's good to what the going rates are on buildings in the region," Marrison says. "Farmers need to know how to utilize those old buildings, whether it be to rent them out to another farmer or producer for extra hay space or to milk dairy cows."

Make Money From Unused Farm Buildings

To help farmers and producers come up with fair, viable rental rates for farm buildings, the North Central Farm Management Extension Committee conducted a survey of farmers and producers across the Midwest, including Ohio and Indiana, to create the 2014 Farm Building Rental Rate Survey.

The survey provides rental cost information on:
•Beef finishing, open lot and sheds.
•Dairy milking parlor, cow housing.
•Heifer housing – no labor, no feed.
•Swine – farrowing, nursery, finishing .
•Machinery storage – machine shed with or without concrete floors, high doors.
•Grain storage.
•Hay storage – for small square or large square or round bales.
•Rural housing – two, three, four or more bedrooms.

The survey was completed by farm operators, farm owners, professional farm managers and rural appraisers.

The survey worked on the assumption that the building tenants would provide labor and management and pay the cost of utilities and minor upkeep. The survey also assumed that the building owners would generally be responsible for major repairs and insurance coverage. Individual rental rates will vary according to the age, condition, size, location and efficiency of the particular building being rented.

"The great thing about this survey is that it's a good document to give producers and farmers some kind of guidance to get the conversation started between themselves and a prospective tenant," Marrison says. "Farmers can use the survey results as a starting point and then personalize it and run their numbers to see if it will work in their individual situation.

"It's just another useful tool that farmers can put into their toolboxes to use to make some sound management decisions."

The survey can be found at go.osu.edu/farmbuildingrents. For more information, contact Marrison at [email protected] or 440-576-9008, ext. 106.

Source: OSU Extension