I have some East Texas land, 88 acres, in my family that I am interested in purchasing. I don't have much experience in this area, some insight beyond googling would be helpful from others. The land is not fenced, so if I lease it to someone with cows, a fence would be needed.

1) I could write a check, but would like to explore finance options. Any lenders that would be recommended?
2) anyone dealt with leasing to a third party? Things to watch out for?
3) any websites that are good references for determining a fair price for a lease rate?
4) thinking about telling the third party if they put the fence, then the lease is free for 6 months/1 year/etc. any downside to that?
5) growing up I would have never thought of this, but seems like times are different. Any liability concerns from the lease if someone gets hurt?
6) main thing I want the land for is hunting and investment diversification. The cows would help with an ag exemption, but I could plant trees as well. Any reason to prefer trees?
6) other thoughts?

My guess is you will have to fence it yourself of have it fenced. It's worth a shot to see if someone would lease it and fence it themselves, but it would have to be a long term lease, or some structure where you reimburse them if the lease is cut short.

A few questions, what is on the 88 acres? Utilities ponds buildings etc..

If I have to put up a fence I'm not paying a lease. I'll spend more on fencing material then a lease would ever cost me. The last time I looked into leasing it was somewhere in the neighborhood of $100 per acre per year.

You want to build your own fence that way you know it's good construction good material, and not whatever is left lying around. Especially if you have to clear anything our when building.

Liability is worked out with lease agreements, but I would always advise to have insurance up to date, and know the names of the local LEO's for when Murphy comes to visit.

East Texas is kind of a big place, where is this place located?

Just Google Texas land financing and you will see the big boys. I believe Capital farm credit is a sponsor. Also call a few local banks, they like those deals. Land can't drive off and if not a homestead pretty easy to foreclose.

Typical financing is 20% down up to 15 years at 6ish percent..

See if it is Ag exempt on taxes and if so under what plan. That could direct you for future use. If not plan on setting up a plan to get exempt. Takes five years, I think so you would need to get busy.

As for someone fencing it forget that. Do it yourself so you know the quality. At least subcontract the work A non owner will just build cheap as possible.

Lots of great sources here so you should get plenty of good advice

Outside of Crockett. Land is empty pasture with the occasional tree except for a small tank and a tiny barn. It was caught up in the forest fires 7/8 years ago, which is when the fencing all burned up.

John,

You won't get rich leasing out your land for grazing here in Texas. You're lucky to get $14/acre per year in the best parts of the state. Out in west Texas, it's dirt (and dust) cheap.

Here's a chart, and the rates are per year:

Texas Grazing Lease Rates by County - 2020

The main reason, I think, folks do this is to maintain the agricultural special valuation for property tax purposes. Secondarily, IF you have a very good lessee, you'll get your fences maintained and your pastures possibly fertilized and maintained, so that they don't get overgrown with brush.

If you neglect nice grassland, in many places the mesquite, cedar or you name it can take it over. Then in a few years, you've got a real mess on your hands.

Good luck.

Doubt that happens in Crockett. But your point is valid. Nature will take over somehow

78_Pacecar said:

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A few questions, what is on the 88 acres? Utilities ponds buildings etc..

If I have to put up a fence I'm not paying a lease. I'll spend more on fencing material then a lease would ever cost me. The last time I looked into leasing it was somewhere in the neighborhood of $100 per acre per year.

You want to build your own fence that way you know it's good construction good material, and not whatever is left lying around. Especially if you have to clear anything our when building.

Liability is worked out with lease agreements, but I would always advise to have insurance up to date, and know the names of the local LEO's for when Murphy comes to visit.

East Texas is kind of a big place, where is this place located?

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I'll lease you my place for 1/2 that.

john2002ag said:

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Outside of Crockett. Land is empty pasture with the occasional tree except for a small tank and a tiny barn. It was caught up in the forest fires 7/8 years ago, which is when the fencing all burned up.

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Just a question on the burned fences. Was (is) there any government assistance on replacing it?

S.A. Aggie said:

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john2002ag said:

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Outside of Crockett. Land is empty pasture with the occasional tree except for a small tank and a tiny barn. It was caught up in the forest fires 7/8 years ago, which is when the fencing all burned up.

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Just a question on the burned fences. Was (is) there any government assistance on replacing it?

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I'll chime in with my 2 cents.. Generally, the feds don't cost share property line fences, only cross fences for grazing management. With all the wildfires a few years back, there might have been some emergency funding, but that's long gone.

Somewhat related questionwhat's the cost for building a barbed wire fence, with needed corners and stretch posts? $2-3 a foot in the ballpark?

Depends on materials & labor costs

So you built a fence and turned some cows loose.

You need a trap to pen them into a smaller acreage? Do you have a pen to catch them again? Or do you have to find someone with a portable pen set to run their cows? Do you have electricity and a well? Tanks are great, but clean reliable water is better. Anywhere secure to store equipment?

A lot more to running cows than fence and grass.

will.mcg said:

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Depends on materials & labor costs

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You don't say!! That's why I askedwhat's the current ballpark number on those materials and labor costs you speak of?

I just built about 7000 ft of fence. I built my own He's and other stretch posts. Altogether, material including renting a skid steer for 3 days was about 9k with 5 strands and 12 ft post spacing. That includes a 2 3/8" post every 100 ft.

Obviously, I work cheap so my labor costs were cheap, but there is a guy in the panhandle who offered to build the fence entirely with my materials for 0.85 per ft.

john2002ag said:

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Outside of Crockett. Land is empty pasture with the occasional tree except for a small tank and a tiny barn. It was caught up in the forest fires 7/8 years ago, which is when the fencing all burned up.

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Ah yes, home of the famous International Bluegrass Band Competition. REK and his band took second place there. Before that fateful morning in the cool gray light of dawn.

Most every situation is different, so there's no "one size fits all" regarding construction costs. If the fence line needs to be cleared of trees/brush, that's a big cost. Also the terrain can dictate extra time/expense if/when it's uneven, hilly, rocky, or limestone, requiring holes to be drilled for each post.

Consult with your local County Agriculture Extension Agent for advice and information. Also, talk to folks at your local feed store, as they will be another invaluable source of information. If you find the right person, you might be able to swap their labor to build the fence for a long term lease. Native pasture worth about $10/acre/year would include a perimeter fence, reliable (year round) source of water, and some "working pens" to gather, sort, and ship cattle from. So, as you can see, it's a long-term proposition, this "ranching thing".

By the way, in many cases, a grazing-hunting lease can be combined, although this is probably more rare now. Bottom line, if you can find someone to "take care" of your place and maintain the Ag exemption for you (for nothing), you'll probably be ahead of the game.

Note the wink face on my post. As Boerne Gator mentioned there are a lot of variables in fence building. The most recent fence I built was net wire with galvanized corner bracing, line posts, & t-posts. On relatively flat ground. All I had to clear was high grass. I built it myself so labor costs were sky high.

Here is some useful information for you: http://www.sjfenceco.com/farm-ranch/

In your situation I would check with neighbors and see if they want to graze it. Offer them a deal they can't refuse price wise. No fence to have to up, and have somebody watching your land. Throw a fence up on your dime whenever you are ready.

B-1 83 said:

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78_Pacecar said:

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A few questions, what is on the 88 acres? Utilities ponds buildings etc..

If I have to put up a fence I'm not paying a lease. I'll spend more on fencing material then a lease would ever cost me. The last time I looked into leasing it was somewhere in the neighborhood of $100 per acre per year.

You want to build your own fence that way you know it's good construction good material, and not whatever is left lying around. Especially if you have to clear anything our when building.

Liability is worked out with lease agreements, but I would always advise to have insurance up to date, and know the names of the local LEO's for when Murphy comes to visit.

East Texas is kind of a big place, where is this place located?

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I'll lease you my place for 1/2 that.

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Yeah I fat fingered an extra zero in there. I blame it on the kids.

A few comments....

I hear good things about Capital Farm Credit. Not used them for land purchases but my father has used them with farm production loans.

The Agrilife Lease template is a pretty good start. It can help you cover topics you may not have considered.

As far as fencing, we have done new fences a few different ways.
-Option 1: You pay for or install all fence yourself.
-Option 2: We paid for all the materials and the leasee actually built the fence, no lease fee discount
-Option 3: Leasee pays for all fencing expenses and in return gets a discounted annual lease fee for X years with lease options for X years

We have an office in Crockett. Contact us online or at 877-775-0404. We can help answer your questions.

SteveBott said:

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Just Google Texas land financing and you will see the big boys. I believe Capital farm credit is a sponsor. Also call a few local banks, they like those deals. Land can't drive off and if not a homestead pretty easy to foreclose.

Typical financing is 20% down up to 15 years at 6ish percent..

See if it is Ag exempt on taxes and if so under what plan. That could direct you for future use. If not plan on setting up a plan to get exempt. Takes five years, I think so you would need to get busy.

As for someone fencing it forget that. Do it yourself so you know the quality. At least subcontract the work A non owner will just build cheap as possible.

Lots of great sources here so you should get plenty of good advice

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Good advice here, but have to address the financing piece. 20% down is still a good standard metric, but some lenders can do as little as 15% now on ag tracts. They also can go up to 30 years on amortizations. 6 percent interest is a thing of the past right now... even on 30 year loans.

I agree. But I was just spit balling from the peanut gallery. It depends how much you shop the deal