9 replies to this topic

[Loop]

Hello, We are big fans of F2F, with long standing plans to start a 12+ acre small holding with the long term goal to be running an experience camping centre with camping pods, yurts and eventually log cabins, one of which will also be our home on site amongst other seasonal businesses.

 

So we have powerpoint presentations and excel sheets on the subject coming out of our ears. What we lacked is finance to buy the land. Soooo we believe we have solution but what I am unconfident  on whether it would still work within the framework of the book and would appreciate your thoughts.

 

The plan is to get an investor (family member) to buy the land on a rent to buy basis. Rent to Buy, a phenomena brought over from the US and used by local councils for people to get their foot on the property ladder by renting a property and over a course of 10 years a proportion of the rent is set aside as a deposit. There is a legally binding contract protecting both parties and it's good for the investor as they make more money on their initial investment and have secure tenants. It's obviously good for the 'rent to buyer' to get around the problem of getting a mortgage without a deposit. So the theory is to apply this method to land.

 

What I worry about is because on the land deeds we won't own the land can we carry out the business plans aka, living on site in a static whilst building work is being carried out?

 

Any experience on anything like this out there?

 

Thanks In Advance

Loop

 

[FCF]

I might not be right here, however check out the length of rental agreement which would help you with planning! I believe you need a rolling 7 year agreement or thereabouts.

 

With your approach i am not sure how valid this will be, but may help !?

 

Good luck FCF

[boiow]

i don't see why this wouldn't work.  i am sure that you don't have to be the owner to carry out the operations necessary to live onsite and if there is a difficulty then a slight tweak in the contract should do the trick.

[Loop]

Great thanks both for your thoughts, good that you think in principle a tenant should still have the rights to live on the land and build a small-holding. I suppose that is the good thing about this potentially being a family member in that contracts can be tweaked if required ;-) I'll also research about the rolling agreement.

 

Cheers

[tim'rous beastie]

could your family member buy it then sell it to you on a private mortgage?

[Devon Cream]

We too lacked sufficient funds and are therefore renting the whole of the smallholding from a 'family member'.  There have been no problems with different surnames and GPDOs and also we were not given any problems when it came to putting down the Lessor's name when we received the expected pcn but we do advise you to ensure that the 'family member' is aware of the possibility, which will be a probability if your neighbours are nimbys.

 

Our tenancy agreement allows for a peppercorn rent and we receive certain funds for agreed capital expenditure as the Lessor maintains that we are increasing the value of the land and therefore it should not be at our expense as Lessees.  Hubby worked in finance for many years and I think the arrangement he has made is sound.  There is even an arrangement regarding the purchase of certain items of equipment such as the tractor which shows up in the accounts as a debit/loan..

 

The arrangement also allows us to have use of any rental paid for a wind turbine or solar panels on the land once the installation has been capitalised and that sum shared out equally between Lessor and ourselves as Lessees.  I would therefore recommend that you contact a company like Lumicity and see whether they would be interested in providing you with wind turbine and/or solar panels.  In my experience that company likes to go for green and not greed and I cannot recommend them too highly.

 

With what has happened so far, i would recommend that if you do not have the funds see whether a family member would help out.  Show them how land prices have increased in the area and that is WITHOUT any improvements you have made.  We were convinced to go for it when the author of the book gave figures for the increases in value of the land in certain circumstances and that is why we were able to find a 'family member' to help us out.

 

Let me know if you would like any further details.

[Groundhog]

There is also the risk of decreasing the value of the land if an unsuccessful application or enforcement or pcn's are placed or if relations with neighbours end up being fraught all this will become apparant to prospective purchasers.Would you buy a plot with history ? 

[gods]

Hi very interested in this thread. - we are looking t purchase field as husband & wife from funds via existing business then rent the land to wife who will run the farming business and hopefully gain pp eventually!  Interested in the type of lease that others have set up Any help welcome.

[Loop]

DevonCream thanks so much this is such great stuff to hear! We're not going mad hurrah! Hearing your story is exactly the type of thing we need to give us the confidence to really go for it. Interesting about your experience with Lumicity as well as I'd been wondering about this sort of thing. The increased land value is very much the way we are selling this as an investment opportunity for our family member. As a property man he has not previously dealt with agricultural land so we really need to prove viability as a low risk venture. Like you said DevonCream, and from figures we see, the land should increase in value with or without what we are doing anyway and we'll be providing rent and 'fingers crossed' adding value aswell. Grounddog I appreciate what your saying and minimising risk is something I am so conscious of but equally the risk you describe would presumably be a risk to anyone carrying out the books idea I think? DevonCream I think you have also provided us with another way to approach are poorly financed plans if said family member doesn't go for it. If its ok I may well have the odd question for you Onwards with scheming Loop

[Loop]

Sorry Gods I was writing when your thread came through. I haven't set up my rent to buy lease on land yet but it is very straight forward on property and so no reason the same could not apply for land. Good luck