March 2013 "About Us" Update

 

 

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March:   http://www.dhdoster.com/2013 New Races to Run.htm

 

 

February 2013 "About Us" Update

Here's a link to our Update for

February:   www.dhdoster.com/2013 FPA 1.htm

 
 

 

Flex Rent

Hello.  This is my first blog.

After realizing that FSA considers only two types of rents, cash and share, I plan to rewrite my Right Rent article.

In practice, flex rents have included various features.  I will define flex rent as being based on a share of the revenue. 

In a flex rent, If the revenue is based on the farm’s actual crop produced, I think FSA will consider it as a share rent. 

In a flex rent, If the lease includes a minimum rent, plus a share of the revenue which is not based on the farm’s actual production, I think FSA will consider it as a cash rent. 

To me, a share lease is based on sharing the contribution margin (revenue minus variable costs), based on the farm’s actual production.

 

A share-like cash rent includes a minimum cash rent, plus a share of the contribution margin, as calculated using outside the farm gate values, not a farm’s actual values. 

 

After the parties agree on the amount of a so-called tenant margin (contribution margin minus owner margin, the rent),I think any of the above leases can be updated, almost automatically, by the way I describe in the right rent paper.  However, my 100-0, 50-50, and 0-100 tenant margin cash rent contracts are the easiest to update.

 

I am not an attorney, tax advisor, or FSA advisor.  Contact your appropriate advisors before using any of this information.

Regards,

Howard Doster

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Thanks,
 
Howard