Land Rent Calculator
Calculate fair cash rent or crop share rent based on land value, soil quality, and expected revenue.
Results
Visualization
How It Works
Fair land rent can be estimated three ways: (1) capitalization method using land value and target return, (2) revenue share method using expected gross revenue, (3) soil-adjusted method using productivity ratings. Most experts average multiple methods.
The Formula
Cap Method: Rent = Land Value x Target Return (3-4%)
Revenue Method: Rent = Gross Revenue x 30-35%
Crop Share: Rent = Yield x Price x Share%
Revenue Method: Rent = Gross Revenue x 30-35%
Crop Share: Rent = Yield x Price x Share%
Variables
- Cap Rate — Target return on land value, typically 3-4% for prime cropland
- Revenue Share — Rent as percent of gross revenue — 30-35% is the sustainable range
- Crop Share — Landlord receives a % of the crop (25-40% depending on who pays inputs)
Example
Land worth $10,000/acre, corn at 180 bu x $4.50 = $810 gross. Cap method: $350, Revenue: $267, Soil-adj: $227. Average: ~$281/acre.
Tips
- Cash rent above 35% of gross revenue puts the tenant at high risk in bad years.
- Flex leases share price/yield risk — base rent + bonus if revenue exceeds a threshold.
- Crop share shifts more risk to the landlord but gives them upside in good years.
- High land values often make rent-to-value ratios unsustainable — negotiate based on revenue, not land value.