A Partial Budget Approach to Estimating Cash Rents

Gregory A. Ibendahl

Journal of the ASFMRA, 2010, vol. 2010, 5

Abstract: Because of the extra risk, tenants who cash lease land should earn more money than those tenants with share leases. A competitive land market and the need to support bigger and newer machinery can easily lead tenants to pay more than they should for a cash lease. Share leases tend to avoid the overpayment problem as the share percentage is usually relatively fixed. Since share leases are not always available, this paper presents a way for tenants to determine if a cash lease rate is reasonable for the area by using a partial budget approach that compares lease types.

Keywords: Financial; Economics (search for similar items in EconPapers)
Date: 2010
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Persistent link: https://EconPapers.repec.org/RePEc:ags:jasfmr:96412

DOI: 10.22004/ag.econ.96412

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