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Finance First: Share improvements with landlords

It’s important to regularly share what you’re doing, above just paying the rent.

Should we tell our landlords everything we’re doing to improve their land? My brother says we should just do it, and they’ll figure out we’re doing good things for them. Your thoughts? — C.C., Missouri

This makes me think about what hospital nurses say about the importance of charting and writing down what’s happening: Basically, if it didn’t get written down, it didn’t happen.

I believe it works similarly for landlords. Whether they live a mile, an hour or a state away, they don’t know all the things you’re doing to add value to their land. Maybe you’re always mowing the ditches carefully and taking excellent care of fertility and soil management — but how would they know?

There’s always a cost to caring for and improving the land. If we’re not telling landlords your story, they might become more vulnerable to other people telling their own story of how well they would take care of the land.

It’s important to regularly share what you’re doing, above just paying the rent. Also, consider the bigger enhancements, such as tiling or applying lime, that take time to get a return on. With costlier improvements, it’s critical to educate the landlord, negotiate expectations and get it all in writing.

A few years ago a farmer I knew invested thousands into tiling a piece of ground — without any agreement in writing or even discussion with the landlord around cost-sharing or a payback period. The farmer expected the landlord would be happy and let him rent the ground for many years. A year later, the landlord got a new tenant and the farmer was out of luck — along with several thousand dollars.

Getting on the same page is important, whether you consult an attorney or just seek an email response of agreement from your landlord. You’ll need to get clear on expectations, benefits and how the process will work. Otherwise, you’re merely hoping that things will work out the way you want them to.

Frye is president and CEO of Water Street Solutions. waterstreet@waterstreetconsulting.com

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