Mindful Matters for the Maturing Farmstead Women … Combined.pdfWomen Managing Ag Land Conference...

Michael J. Krause

Accredited Farm Manager

Licensed Real Estate Broker in Nebraska/Iowa

[email protected]

1

• Professional Farm Management

• Farmland Sales & Acquisitions

• Farmland Auctions

• Agricultural Appraisals

Mindful Matters for the Maturing

Farmstead

Women Managing Ag Land ConferenceDecember 11, 2019

Caring for You and Your Farm

Michael J. Krause



[email protected]

2

www.hfmgt.com

YOU HAVE AN OLD HOUSE

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Asset Stewardship

YOU HAVE AN OLD HOUSE

What do you do?

• Problem

• Windfall

Michael J. Krause



[email protected]

3

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Asset Stewardship• Preserve what you have

• Improve what you have

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Asset Stewardship

How did it Originate?

• Original homestead

• Newer modern family home

• Purchased farmland with a house

• Employee living unit

• Family member returning

Michael J. Krause



[email protected]

4

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Sentimental vs. Practical

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RETAIN

SELL

DEMOLISH

Michael J. Krause



[email protected]

5

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Retain, Sell or Demolish• Evaluate whether to retain

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Retain, Sell or Demolish• Evaluate whether to sell

Michael J. Krause



[email protected]

6

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Retain, Sell or Demolish• Evaluate whether to demolish

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Retain:

House and Building Site Condition

• Quality House – minimal updating

• Major Repair to make habitable

• Functionally obsolete floor plan

Michael J. Krause



[email protected]

7

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Retain: Top quality house little need for repair

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Retain: Major repair needed to make habitable

Michael J. Krause



[email protected]

8

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Retain: Functionally obsolete floorplan

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Retain: Five bedroom/one tub/one toilet

Michael J. Krause



[email protected]

9

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Retain:

Setting the Rent Calculation

• Home’s Value

• Comparable Rentals

• Factors Impacting Rental Values

• Annual Rental Adjustment

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Retain:

Using Your Home’s Value

• Determine Value

• 0.8% to 1.1% Factor

• $100,000 x 1.1% = $1,100 monthly rent

Michael J. Krause



[email protected]

10

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Retain:

Comparable Rentals

• Number of bedrooms/bathrooms

• Year Built

• Square Footage/Acreage Size

• Out Buildings

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Retain: Lease buildings for storage or livestock

Michael J. Krause



[email protected]

11

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Retain:Factors Impacting Rental Values

• Economic Trends

• Bad economy – rental demand increases

• Decreased demand – reduces rental rate

• Location

• Hard surface road

• Proximity to town

• Amenities

• Attached garage

• Functional obsolescence

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Retain: Attached Garage

Michael J. Krause



[email protected]

12

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Retain: Machine Shed

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Retain:

Annual Rental Adjustments

• Maintenance/Repair Cost*

• Real Estate Taxes

• Cost of Vacancy Periods

Michael J. Krause



[email protected]

13

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Pictures of House Prior and After Paint

Before After

Retain:

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Pictures of House Prior and After Vinyl Siding, Windows and Doors Installed

Before After

Retain:

Michael J. Krause



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14

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Maintain acreage for appearance and/or functionality.

Crib used for machinery storage by house tenant.

Before After

Retain:

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Mechanics of a Lease

• Binding Contract

• In Writing

• Except residential lease agreements 1-year

or less – (not recommended)

• Provisions to Protect Owner

Michael J. Krause



[email protected]

15

www.hfmgt.com


5 Key Elements of a Valid Contract:

• A legal purpose

• Mutual acceptance

• Consideration

• Voluntary acceptance

• Competent parties

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Lease Provisions:

• Term

• Rental

• Rental Deposit

• Use-Absences-Abandonment

• Utilities

• Maintenance

• Access

Michael J. Krause



[email protected]

16

www.hfmgt.com


Lease Provisions:

• Assignment and Subletting

• Fixtures and Improvements

• Nonpayment of Rent

• Notice

• Liability and PP Insurance

• Other Provisions

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Mechanics of a Lease: Example

6. Maintenance: b):

Michael J. Krause



[email protected]

17

www.hfmgt.com

Mechanics of a Lease6. Maintenance: b):

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Vetting House Tenants

Application:

• Background Check

• Credit Check

• Drivers License

https://www.mysmartmove.com

By TransUnion

https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=2ahUKEwixoujx9ajmAhUMRa0KHfX-CDYQFjABegQIAhAB&url=https%3A%2F%2Fwww.mysmartmove.com%2F&usg=AOvVaw2zHB8VfAWAGaOjKyUJlrzN

Michael J. Krause



[email protected]

18

www.hfmgt.com

Safty and Liability Concerns:

Is it worth it???

• Smoke Detector

• Carbon Monoxide Alarm

• Lead Paint

• Monitor Illegal Activity

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Safty and Liability Concerns:Administer Building and Liability Insurance

Michael J. Krause



[email protected]

19

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Retain:

Other Opportunities

• Hunting Lodge

• Bed and Breakfast

• Family Retreat

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Sell Off Farmstead:

Evaluate Property Usefulness

• Land Purchase

• Location

• Center Pivot Irrigation

• Farmability

• Neighbor Nuisance

• Soil Quality

• Livestock Handling

Michael J. Krause



[email protected]

20

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Sell Off Farmstead: Consider Sale

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Sell Off Farmstead: Pivot Obstruction

Michael J. Krause



[email protected]

21

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Sell Off Farmstead: Neighbor Nuisance

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Sell Off Farmstead: Raze Farmstead

Michael J. Krause



[email protected]

22

www.hfmgt.com

Sell Off Farmstead:

Commence the Sale

• Real Estate Sales Agreement

• Survey

• Easements

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Sell Off Farmstead: Easements

Michael J. Krause



[email protected]

23

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Demolish

• Inspect

• Abatement

• Select Contractor

• Burn/Bury/Haul Away

• Land Reclamation Costs

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Demolish: Inspection for Asbestos

Michael J. Krause



[email protected]

24

www.hfmgt.com

Demolish: After Abatement

Transite Siding/9” Floor Tiles/Window Glazing/Furnace Duct Wrap

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Demolish: Permanent Site Map

Michael J. Krause



[email protected]

25

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Demolish: Deconstruction Cost

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Demolish: Farmstead Clean-up

Michael J. Krause



[email protected]

26

www.hfmgt.com

Demolish: Rural Fire Department

Practice Burn for Training

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Demolish: Rural Fire Department

Practice Burn for Training

Michael J. Krause



[email protected]

27

www.hfmgt.com

Pole Shed Roof Damage

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Barn and Silos Before Removal

Michael J. Krause



[email protected]

28

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View After Barn and Silos Removed

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Cattle Shed Removal

Before After

Michael J. Krause



[email protected]

29

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Three Small Bins Along Lane Removed

Before After

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Hog Shed and Silo Removal

Before After

Michael J. Krause



[email protected]

30

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Hog Shed and Concrete Converted to Crop Acres

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Building Summary - From This . . .

Michael J. Krause



[email protected]

31

www.hfmgt.com

To This . . .

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IS YOUR INSURANCE

ADEQUATE?

Tornado destroyed this barn.

Michael J. Krause



[email protected]

32

www.hfmgt.com

Insurance proceeds totaling $16,500 were invested in drainage

and grain storage. Site was leveled and seeded to grass due to

the highly erodible nature of the soil.

www.hfmgt.com

SUMMARY

Knowing the potential of your

farmstead combined with careful

consideration of your long-term goals

will make YOUR decisions much

easier with regard to “Retain, Sell or

Demolish”.

Michael J. Krause



[email protected]

33

www.hfmgt.com

Caring for You and Your Farm

Questions?

RESIDENTIAL LEASE

This property offered without regard to race, color, creed, sex, or national origin. PARTIES. This agreement between , by Hertz Farm Management, Inc., Agent, hereinafter called "Owner", and , hereinafter called "Tenant", whereby Owner leases to Tenant with the improvements thereon THE PROPERTY described as located in County, State of Nebraska, hereinafter called "Property", in consideration of the following terms, provisions, and conditions: 1. TERM. The duration of this lease shall be from the day of , 20 , to and including

the day of , 20 . At the expiration of the term of this lease, Tenant shall vacate the premises, or at the option of the Owner, this lease may be renewed on a month-to-month basis at a rental of $ per month, with all other provisions of this lease to remain in full force and effect, including the requirement of 30 days notice to terminate.

2. RENTAL. Tenant agrees to pay Owner a rental of $ per month, in advance, on the first day

of each month during the continuance of this lease. Interest will accrue at 15% per annum upon all unpaid rent. The first rent payment shall be due upon execution of this lease. All sums shall be paid to the Owner at Hertz Farm Management, Inc., , or at other locations as Owner should direct.

3. RENTAL DEPOSIT. At the time of execution of this lease, Tenant agrees to pay to Owner in trust,

the sum of $ to be held and disbursed as a rental deposit pursuant to provisions of the Nebraska Uniform Residential Landlord and Tenant Act. This rental deposit cannot exceed one months rent.

4. USE - ABSENCES - ABANDONMENT. Unless otherwise agreed in writing, Tenant shall occupy and

use above described property as a single family dwelling unit only, with the total number of adults and children residing herein not to exceed . If a business is permitted, Tenant shall not permit any unlawful business to be conducted on the property and shall comply with all lawful regulations, restrictions, ordinances, and laws applicable to the purpose, use, and occupancy of said premises. Tenant shall notify Owner of any anticipated extended absence from the premises not later than the first day of the extended absence. An absence shall be "extended" if it is longer than 14 days. All property found in or about the premises after Tenant surrenders possession to Owner shall be considered abandoned and Owner may dispose of same as he shall see fit without compensation to Tenant.

5. UTILITIES. Unless otherwise specified herein, Tenant shall furnish their own heat and all public

utilities. These include gas, water, electricity, garbage, and trash removal. 6. MAINTENANCE. Tenant accepts the premises in its present condition and as part of the

consideration for this lease at the specified rental. Tenant shall:

a) Use reasonable care and diligence keeping premises neat and orderly and in taking care of same.

b) Not allow ashes, rubbish, manure, tin cans, inoperable automobiles or other vehicles, or trash of any kind to accumulate on said premises, nor in the roads adjacent thereto and to promptly remove the same therefrom. The tenant shall provide his own trash receptacles.

c) Not deliberately or negligently destroy, deface, damage, impair, or remove a part of the premises, or knowingly permit a person to do so.

d) Be responsible for any damages to the premises caused by Tenant, Tenant's family, or Tenant's invitees. e) Be responsible at Tenant's expense for stoppage of sewers chargeable to Tenant's use, broken water pipes due to freezing, and ordinary maintenance such as changing of air filters and leaking water faucets.

f) Take good care of the trees, shrubs, and other vegetation and replace any destroyed during this tenancy by lack of such care or by Tenant, Tenant's family, or Tenant's invitees.

g) Mow, trim, and maintain the lawn in a timely manner to ensure a neat appearance.

h) Be responsible for testing each smoke detector alarm on a regular basis, replacing the battery if necessary, and notifying Owner if smoke detector is inoperative.

i) Use in a reasonable manner all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities on the premises, pay all operating costs, and handle all routine repairs and maintenance. Tenant shall immediately notify landlord of any non-routine repairs or maintenance that he believes the landlord should make on such items.

Owner shall be responsible for only such maintenance, repairs, or improvements as specifically authorized in writing by Owner. Owner agrees to make the following repairs only to the premises:

7. ACCESS. Owner or his agent may enter the premises at all reasonable times to show the property to

prospective tenants or purchasers, make repairs and inspect the property, all without notice. 8. ASSIGNMENT AND SUBLETTING. Tenant shall not sell or assign this lease or sublet said premises

or any portion thereof without the written consent of the Owner. 9. FIXTURES AND IMPROVEMENTS. Tenant shall leave upon the premises at the expiration of this

lease, all locks, brackets for curtains, and all other fixtures attached to doors, windows or woodwork, and all alterations, additions, or improvements made by Tenant, without any payment therefore. Tenant shall not erect, construct, or place any structure such as a garage, mobile home, or other building without written permission of the Owner. Additions to the premises such as rip-rap, bank stabilization and road maintenance by Tenant shall become part of the property without any compensation for same from Owner.

10. NONPAYMENT OF RENT. In addition to Owner's other remedies provided by law, and without

prejudice thereto, if rent is unpaid when due, and Tenant fails to pay the rent within three (3) days after notice by Owner of nonpayment (which Notice shall be in the form of a Notice to Quit) and the Owner's intention to terminate the Lease if the rent is not paid within that period of time, then Owner may terminate the Lease.

11. NOTICE. Either party may terminate this lease without cause by giving at least 30 days written notice

in advance of such termination to become effective on , or any subsequent month during the continuance of this lease. At the expiration of this lease, Tenant agrees to surrender possession of said premises to the Owner without further notice to quit, and in as good repair as the same are now in or may hereafter be placed, normal wear excepted.

12. LIABILITY AND PERSONAL PROPERTY INSURANCE. Tenant agrees to be fully responsible for

and insure those contents of tenant house belonging to Tenant for any casualty losses that may be incurred and further agrees to have their insurance agent provide proof of insurance coverage each year. If tenant fails to secure said insurance, Tenant understands that Tenant is personally accepting full responsibility for any losses incurred and specifically waives any demand on landlord or liability of landlord for any losses incurred from fire, lightning, wind, water, earthquake, or other natural disaster.

13. OTHER PROVISIONS. Other provisions to this lease agreement are listed below:

a) No pets permitted inside the rental house.

b) Wood burning or kerosene heating units are not allowed in the house.

c) This lease is subject to the right of the farm tenant to have access through said property to farm fields.

d) No guarantee, either expressed or implied, is made by Owner for a continuous and adequate water supply. Owner has no responsibility to supply hot water. Water heater shall be maintained

and/or supplied by the Tenant.

It is further understood that both parties have read the terms and provisions of this agreement and have agreed to abide by the terms and provisions herein.

In Witness Whereof, we affix our signatures this day of , 20 . Owner C/o Hertz Farm Management, Inc. Agent for Owner By 11717 M Circle Omaha, Nebraska 68137-2007 Address 402-697-7500 Telephone #

Tenant Social Security # Address Telephone # Tenant Social Security # Address Telephone #

FORMS\LEASE\RES

MGR _____ (Non-Agricultural Residence)

RENTAL APPLICATION HERTZ FARM MANAGEMENT, INC.

11717 M Circle Street Omaha, Nebraska 68137-2007

402/697-7500 First Name (print): ___________________ Middle: __________ Last: ______________________ Current Address _____________________________________________ Date of birth / / Previous Address ____________________________________________________________________ Home Phone ______________________ Work Phone _________________________________ Social Security # _______________________ Driver’s License # ________________ State _______ Spouse Name: ______________ Middle: _____ Last: _____________ Date of birth / / Social Security # _______________________ Driver’s License # ________________ State _______ Names and ages of every person to live with you ___________________________________________ Emergency Contact ________________________________ Phone # _____________________ Pets _______________________________ Waterbed ___________________________ PREVIOUS LANDLORDS: Name Address Phone # When Rent Reason for moving from each of above ___________________________________________________ EMPLOYMENT:

Employer Supervisor Work Phone Wages Applicant) Spouse) How long with each employer __________________________________________________________ Bank Reference ______________________________________________________________________ Assets __________________________ Debts _________________________________ Vehicle Make / Model _________________ Year _______________ License # ___________________ Vehicle Make / Model _________________ Year _______________ License # ___________________

HERTZ FARM MANAGEMENT, INC. - RENTAL APPLICATION REFERENCES: Name Phone Business Relationship HAVE YOU EVER: Broken a lease or been evicted from tenancy? Yes ____ No _____ Willfully or intentionally refused to pay rent when due? Yes ____ No _____ Filed for bankruptcy Yes____ No _____ Been convicted of a felony crime? Yes ____ No _____ Committed a crime that would put you on the sex offender list? Yes ____ No _____ If your answer is yes to any of the above, please explain. SKILLS: (Optional) Plumbing _____ Carpentry _____ Painting _____ Electrical _____ Other _____ Other _____ Cement Work _____ Roofing ______ Appliance Repair ______ Do you own any real estate? _______ If so, where? __________________________ THE APPLICANT HEREBY SUBMITS A $35 APPLICATION FEE PER APPLICANT WHICH IS NOT REFUNDABLE UNDER ANY CIRCUMSTANCES. THE FEE IS FOR PROCESSING YOUR APPLICATION AND RUNNING A CREDIT CHECK. THIS APPLICATION GIVES APPROVAL TO OBTAIN CREDIT AND DRIVING RECORD REPORTS. THE APPLICANT REPRESENTS THAT ALL INFORMATION IS TRUE AND CORRECT AND AUTHORIZES VERIFICATION OF THE INFORMATION AND REFERENCES. THE PROVIDING OF UNTRUE OR INCORRECT INFORMATION SHALL BE GROUNDS TO REFUSE OR TERMINATE ANY RENTAL AGREEMENT. THE OWNER RESERVES THE RIGHT TO REFUSE ANY APPLICANT WITHOUT STATING A REASON FOR THE REFUSAL. THIS APPLICATION DOES NOT GUARANTEE TENANCY UNTIL THE RENTAL AGREEMENT HAS BEEN SIGNED, THE DEPOSIT MONEY HAS BEEN RECEIVED, AND THE PRESENT TENANT HAS VACATED THE PREMISES. __________________________________ ____________________ Signature Date __________________________________ ____________________ Signature Date F:/DATA/WORDHAL/FORMS/MGT/RENTAL APPLICATION

Professional Farm Managers • Real Estate Appraisers • Real Estate Sales and Acquisitions • Real Estate Auctions • Consultants

11717 M Circle Omaha NE 68137-2218 (402) 697-7500 Fax: (402) 697-7400 www.hertz.ag

Smoke Detector and Carbon Monoxide Alarm Verification Form

Farm #:

Farm Name:

Tenant Name:

Manager Name:

Date of Inspection:

Location Unit Location Unit

Basement Operable Basement Operable

First Floor Operable First Floor Operable

Second Floor Operable Second Floor Operable

Other: Operable Other: Operable Manager Signature Date

Tenant Signature Date

By signing above the tenant acknowledges responsibility to maintain all smoke and carbon monoxide alarms and notify Hertz Farm Management, Inc. within 48 hours if one is not working.

Disclosure of Information on Lead-Based Paint and/or Lead-Based Paint Hazards Lead Warning Statement Housing built before 1978 may contain lead-based paint. Lead from paint, paint chips, and dust can pose health hazards if not managed properly. Lead exposure is especially harmful to young children and pregnant women. Before renting pre-1978 housing, Lessors must disclose the presence of known lead-based paint and/or lead-based paint hazards in the dwelling. Lessees must also receive a federally approved pamphlet on lead poisoning prevention. Lessor’s Disclosure (a) Presence of lead-based paint and/or lead-based paint hazards (Check (i) or (ii) below):

(i)______Known lead-based paint and/or lead-based paint hazards are present in the housing (explain).

————————————————————————————————————

(ii)______Lessor has no knowledge of lead-based paint and/or lead-based paint hazards in the housing. (b) Records and reports available to the Lessor (Check (i) or (ii) below):

(i)______Lessor has provided the lessee with all available records and reports pertaining to lead-based paint and/or lead-based paint hazards in the housing (list documents below). —————————————————————————————————————

(ii)______Lessor has no reports or records pertaining to lead-based paint and/or lead-based paint hazards in the housing. Lessee’s Acknowledgment (initial) (c)______Lessee has received copies of all information listed above. (d)______Lessee has received the pamphlet Protect Your Family from Lead in Your Home. Agent’s Acknowledgment (initial) (e)______Agent has informed the lessor of the Lessor’s obligations under 42 U.S.C. 4852d and is aware of his/her responsibility to ensure compliance. Certification of Accuracy The following parties have reviewed the information above and certify, to the best of their knowledge, that the information they have provided is true and accurate. Lessor - ________________________ By: ______________________________ _____________________________ Agent Date _________________________________ _____________________________ Lessee Date

Mindful Matters for the Maturing Farmstead Women … Combined.pdfWomen Managing Ag Land Conference...

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Transcript of Mindful Matters for the Maturing Farmstead Women … Combined.pdfWomen Managing Ag Land Conference...