FOR ASPIRING FARMERS
Can you buy a farm with no money?
By Sam Marwood
You earn your way into owning a farm, with a retiring farmer or a backer alongside you. The paths are buying in over time, a lease with an option to buy, or vendor finance.
What you need more than a big deposit is a relationship with that retiring farmer, a written plan, and the willingness to work for your ownership over time. Some savings still matter, because they show the farmer you're good with money.
Some arrangements don't need a big deposit
The focus is a move to ownership over time, earning your way in. The main thing is that you're dedicated, ready to go and willing to work hard with the retiring farmer. Having some savings still helps, because it shows the farmer you're good with money.
Buying in over time
The retiring farmer sells you part of the farm and keeps some, or brings in a backer alongside. You buy as much as you can afford, and you aim to buy more over time.
The business runs as its own entity. You manage it and draw a wage. Your energy grows the business, and you use the profits to pay off debt and buy more equity. In the end the retiring farmer retires and you own the business, or they stay involved in some way. It's flexible.
Lease to buy
You lease the farm with an option to buy it at the end of the lease, at a price agreed at the start. The owner gets a clear way out, and you build equity through your farming profits while you lease. The agreed price usually reflects the farm's current value plus an agreed rise each year, and the value your improvements add beyond that price comes to you when you buy.
Vendor finance
You pay a deposit and the exiting farmer lends you the rest, paid back on agreed terms. You get the land straight away. They get their capital back over time, and a consistent return. It can work when a bank won't lend, though the interest is usually higher than a bank's.
Who could back you
- The retiring farmer. Many want to scale back without leaving, and would welcome someone to do the work they can't keep up with.
- Family and friends who believe in you. Some can't buy a farm outright but would love to back someone they know and trust.
- A local backer. People are buying property in your area. Find out who, and talk to them about your plans.
- The bank. Take your plan in and find out what's possible, even if you don't apply.
The plan is what opens the door
Have a written plan for how you'll run the farm, and a pitch that shows who you are, what you can do, what the opportunity looks like and why backing you is a good decision. Have both ready before a farm comes along.
The full guide, You Can Own a Farm, is free at cultivatefarms.com/resources.
You can build your own plan at cultivatefarms.com/plan.