Are you trying to start an agribusiness but you’re contemplating whether or not to rent a space and don’t know what to do? Keep reading because this article will help you decide whether you should rent a space to kick-start your business or buy land for farming.
I see advertisements online talking about renting space out for farming people jump straight into taking the space without asking the right questions when necessary.
Without minding the kind of agribusiness you wish to start, the same principle applies to all situations. So follow this article to learn what you should look out for before renting a space.
Things To Look Out For Before You Rent A Space For Agriculture
if you’re in the decision stage of starting an agribusiness, especially livestock farming but you don’t want to use your land or space maybe because you don’t have enough space to carry out the business or otherwise, there are different things you should consider and maybe ask your potential property manager which I expatiate below.
i. Why Do They Want To Rent The Space Out
The first thing you should consider when renting a space for agribusiness is the reason they want to rent it out.
Don’t let anyone sweet talk you into renting a space that has issues. If you’re speaking to an agent, make sure they spell out for you the reasons why the owner wants to lease out the space for the business.
For example, if you want to rent ponds for fish farming, you need to ask questions like:
- Why did the owner stop using the ponds?
- Is there a drainage system for easy flow of wastewater in the area?
- Have there been complaints about farming in the area before now?
The questions are a lot that I may not remember putting everything together and this also applies to when renting a space for poultry farming.
ii. Agree On A Schedule For a Visit
The second thing to need to consider when trying to rent a space for farming is to agree on a schedule for a visit when you eventually start your production cycle.
This is crucial to people that are renting a space where the farm is located in a compound the owner is staying. Don’t be surprised people rent out their compound for farming.
That’s not the issue so far it can cater to your needs of starting an agribusiness at that moment. What you should be concerned about is how often you will be allowed to enter the compound.
A brother of mine wanted to expand his fish farming business from the front of his house to a bigger place so he rented a space (paid for 2 years in advance). In the beginning, everything was good but it came to a point that they gave him a rule that there are times he cannot enter the compound.
It was so bad that they never gave him a key to the compound so when/if he wants to feed the fish and they’re not around that’s it for the day.
To cut a long story short, he only did two production cycles and forfeited over half of his rent cos the landlord was not ready to refund.
You don’t want to fall into this kind of hole as a newbie cos it can be frustrating. So before you make payment for the space you want to use for starting your agribusiness, make sure you have a concrete agreement about going and out of the compound.
iii. Ask For The Facility Available For Your Use
Another thing you should discuss when renting a space is the facilities available for your use.
See, people can be funny, they won’t tell you the facilities you will use during your stay on a farm, and you’ll suddenly find out that it is only the pond or pen you rent that you have access to use. You will have to start buying other farming equipment.
Let me explain further, if you’ll be running a fish farm, you’ll need water supply, and light among others, you need to ask your prospective landowner if you’ll have access to the borehole in the compound, power supply or you’ll need to source that yourself.
If you’re going to source your water or power supply, you need to put it in a contract that’ll spell out whether or not the amount spent will be deducted from your yearly rent.
These things are easy to say but might be tricky to carry out. Whatever you do, don’t rely on your knowledge allow.
iv. Agree on The Terms of Payment – Duration of Payment
The next thing to do when you want to rent a space for farming is to speak and agree on the terms of payment.
Some space owners will tell you to pay for two years outrightly with no option to renew. Make sure you ask questions about the period you’ll be paying for and how the amount will be spread.
Some owners will further tell you that whatever payment you make will not be refunded to you, no matter the situation surrounding the reason you want to leave.
Another thing you need to look out for when renting a space is how secure the proposed area is.
Your investment is important, no matter how little it is. You have to be cautious of the environment you want to rent your farm. Is it space secured to have your farm? Will there be a need to put any other security measures in place when you’re ready to start your farm or not?
You should prepare yourself for these things before paying any dime for rent or lease.
Look Out For Any Discrepancies
One thing you should do before putting pen to paper is to do thorough research on wherever you want to rent so that you don’t fall victim to scams.
It is so easy to fall into scams by people desperately looking for money because of a very dare need. Ask for documentation to put things in place in case they want to play smart on you.
One thing you shouldn’t fail to do is to involve an attorney through your journey to renting a space for your proposed farm.
What happens when things don’t go according to plan?
While you’re positive about the business, you should think the opposite; what’ll happen if things don’t go according to plan? What happens to your rent? Will you get a refund or you can sublet to another person?
These questions should be answered by your potential landlord or landlady and that is why it is good to involve an attorney in the process of getting a space to rent.
You should follow legal advice to get things right.
If you’ve been thinking of starting a business in the agric sector but you don’t have much to buy land of your own, renting a space is one option you should explore; but before signing an agreement and paying for that space, make sure you dot all the ‘I‘ and cross the ‘T‘s.
To recap, here are the things you should look out for before you rent a space to start an agribusiness:
- Why do they want to rent the space
- Agree on a schedule of visit
- Know the facility available for use
- Agree on the duration of payment
I’m cheering for your success as you rent that space either as a beginner or for your farm extension.