3% Lease Increase per Year

[TENRMORE]

So we are in our Third year of a three year contract and the lease owner said he is going to go up 3% every year from now on. Its not that much per member but I have been on long term leases before in the hill country and never had this brought up to me. He said everything increases per year, which I agree, We have passed on some young deer, because we want to be there long term. Seems like we have a good relationship with the land owner...

Guess pay it and move on until we can't pay anymore or we think its not worth it...

Thoughts?

[BernieH]

I'd question the basis for 3%. I get that things escalate but it's not always a fixed percentage. I'd tie it to an actual inflation rate or GDP increase - something more reflective of real price increases.

[AntlerCollector]

At least he’s letting you know up front so you can decide what year it’s not worth it anymore.


BernieH you can question it all you want, but the landowner makes the rules. Someone will pay it.

[Outback]

I would much prefer a little increase annually to no increases then one year double or triple. Seems reasonable. I would appreciate something in writing that locks in the 3% for a period of time. It would be uncool to do a 3% annually then one year it doubles.

[Rick]

Originally Posted by BernieH

I'd question the basis for 3%. I get that things escalate but it's not always a fixed percentage. I'd tie it to an actual inflation rate or GDP increase - something more reflective of real price increases.

what if that makes it more than 3%? might better decide if u can live w the increase and not give them ideas that might make it go up more....lol

[Outback]

Originally Posted by BernieH

I'd question the basis for 3%. I get that things escalate but it's not always a fixed percentage. I'd tie it to an actual inflation rate or GDP increase - something more reflective of real price increases.

This made me laugh. I can see a clause like this in the lease agreement.

"Notwithstanding this Lease Agreement, the lease cost will escalate annually by the greater of 2% or the year over year moving average of the Bureau of Labor and Statistics Consumer Price Index."

[M16]

You’re fortunate that I’m not the landowner. I’d do 10% a year.

[Snakelover]

On average over the last five years or so, 3% is a little inflated for Texas. I might counter with 2.5%. But I think his reasoning is sound. In the long run, it might even help keep someone else from scooping the lease out from under you. Personally, I wouldn't be opposed to it, assuming it's a good lease and a good landowner.

[RiverRat1]

Originally Posted by TENRMORE

So we are in our Third year of a three year contract and the lease owner said he is going to go up 3% every year from now on. Its not that much per member but I have been on long term leases before in the hill country and never had this brought up to me. He said everything increases per year, which I agree, We have passed on some young deer, because we want to be there long term. Seems like we have a good relationship with the land owner...

Guess pay it and move on until we can't pay anymore or we think its not worth it...

Thoughts?

That's a good and very reasonable deal if you like the lease. A lot less than actual lease increases over time is my guess.

Lock him in on the 3% and be happy about it. Then in another 1-3 years when guys offer him 30% more than you pay tell him he needs to stand by his 3% per year.

3% per year just to have peace of mind is worth it.

[RiverRat1]

Originally Posted by BernieH

I'd question the basis for 3%. I get that things escalate but it's not always a fixed percentage. I'd tie it to an actual inflation rate or GDP increase - something more reflective of real price increases.

Originally Posted by Rick

what if that makes it more than 3%? might better decide if u can live w the increase and not give them ideas that might make it go up more....lol

Landowner can set rate at whatever he wants. But he can and should include this cost TBH always talks about since we're running out of hunting land..Price and demand.

The only way 3% per year is no good is if the OP is already over paying.

[RiverRat1]

Originally Posted by TENRMORE

So we are in our Third year of a three year contract and the lease owner said he is going to go up 3% every year from now on. Its not that much per member but I have been on long term leases before in the hill country and never had this brought up to me. He said everything increases per year, which I agree, We have passed on some young deer, because we want to be there long term. Seems like we have a good relationship with the land owner...

Guess pay it and move on until we can't pay anymore or we think its not worth it...

Thoughts?

Originally Posted by Snakelover

On average over the last five years or so, 3% is a little inflated for Texas. I might counter with 2.5%. But I think his reasoning is sound. In the long run, it might even help keep someone else from scooping the lease out from under you. Personally, I wouldn't be opposed to it, assuming it's a good lease and a good landowner.

I don't think he asked for opinions or negotiations.

Feels like I'm in the twilight zone. Had to re-read thread... Was offering 2.5% a joke? If the lease is $2,000 per year that .5% would save you $10 LOL

[AntlerCollector]

Originally Posted by riverrat1

i don't think he asked for opinions or negotiations.

Feels like i'm in the twilight zone. Had to re-read thread... Was offering 2.5% a joke? If the lease is $2,000 per year that .5% would save you $10 lol

lmao

[Yamahamma]

The timber (pine) lease I'm on went up 20% this year. Has not had an increase since 2012, then this.

I'd rather gradual instead of a lump increase.

If it wasn't East Texas, I'd stay on. As it is, I'm picking up my equipment in Feb. The herd isn't that strong and I've never seen deer eat a pine cone.

On the hunt for a new place outside of East Texas.

[Hart8]

I remember in 2015 our old landowner pulled up in the yard.I'd just bought a new powerstroke.He was looking at it,and said **** son.That's a good looking truck.Bet it cost ya' an arm,and a leg.
Listen we're gonna go up on the place this year.It jumped 33% lol.
We'd been paying the same for 16yrs though.No biggie,we payed up.

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[Avid Hunter]

Do Not Counter at 2.5% . Silly and petty. Accept it and enjoy. 3% is peanuts, especially for a proven lease.

[Traildust]

Originally Posted by M16

You’re fortunate that I’m not the landowner. I’d do 10% a year.

Why's that? Why not just set a price that makes you happy for the duration of the contract?

[Randy]

Fun ain't free

[Turbo6]

I would love to get a long term lease with our landowner in place at a fixed 3% increase. Let's you know the cost and secures your hunting land.

I feel like we play Russian roulette every year on our spot because the land owner can randomly change the lease cost or decide to give it to another group. Makes putting a management plan together tough.

[RR 314]

I would go 2.77745% per annum. . . and not a cent more. :-) Sounds reasonable to me.

[lanceodom]

Commercially speaking rent bumps annually are commonplace. The more and more hunting leases are now going to written agreements the more and more they are becoming just like a commercial lease similar to an office building or warehouse. We typically see rent bumps in the 1.5%-3% per year in our warehouses. Its really a good way to know what you are up against vs a surprise double or more increase as others have mentioned. I would push to get a written agreement that states what is to happen and for how long, sounds like your landowner is sophisticated enough to think that way??

[M16]

Originally Posted by Traildust

Why's that? Why not just set a price that makes you happy for the duration of the contract?

Supply and demand. When you have a hot commodity maximize your profit. Lots of people looking for a lease.

[BBReezen]

That’s $30 per $1000, not much to complain about at all

[Daniel32]

I can see a 3% increase for a specific time period like 3-5 years and then be able to negotiate afterwards. I say this because you want this to be a long term lease.

Reasoning is a 3% increase on say a 3000 lease over 5 years takes the lease to $3,477.83 starting year 6. Depending on the lease there is going to be a certain point where the lease just isn't worth it for various reasons.

Just my .02 cents

[slayr]

If you’re currently paying $3000, in 10 yrs it’ll be approximately $4000. If it’s worth it to you, then roll with it. At a minimum you’d think it’d still equal the same percentage of your income (assuming you get an average of 3% increase in salary a year).

[Casey]

A couple of things...

He could just play catchup in 5 years for the same dollar amount. I think that would sting more than the 3% per year.

It costs to move off a lease. If you like it, have a good landowner, be happy to secure it with those terms.

We all want annual pay raises of a minimum of 3% per year to cover "cost of living increase" but won't stand for the price of things to go up by the same amount.

[hoythunter02]

That's common in leasing. We had a 5 yr contract on our Brady lease...the increase was written in the contract. Part.of the deal man.

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[webb09]

Ours is 5% and I don’t think twice about it. Just like previously mentioned about the proven lease and supply and demand.

[Turbo6]

You should just get off the lease.

Please send the landowner my contact info. I am willing to pay 5%......

[TENRMORE]

Thanks for all the thoughts and ideas ...its worth 3% for me not to move all my stuff but I have other members to deal with. You just have to put yourself in the land owners shoes sometimes to justify the cost increase.

[gfulton]

Are the deer's horns getting three percent larger every year?

[hooligan]

Seems fair. If it’s a good lease and good land owner I’d ask for a long term contract at that 3%

[JTCowpoke]

Originally Posted by gfulton

Are the deer's horns getting three percent larger every year?

Oh boy, does your car go further on a tank of gas when they raise the price?

[Dale Moser]

Originally Posted by Casey

A couple of things...

He could just play catchup in 5 years for the same dollar amount. I think that would sting more than the 3% per year.

It costs to move off a lease. If you like it, have a good landowner, be happy to secure it with those terms.

We all want annual pay raises of a minimum of 3% per year to cover "cost of living increase" but won't stand for the price of things to go up by the same amount.

Yup


I'd sign that on our lease for a 10 year extension TODAY...and we've been there 25 years, havn't had an increase in several.

[Hart8]

Finish reading the post fella's..He said they'd pay it,til they can't afford it.He ain't bitching,just unfamiliar with it.Jesus.


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[Snakelover]

Originally Posted by RiverRat1

Feels like I'm in the twilight zone. Had to re-read thread... Was offering 2.5% a joke? If the lease is $2,000 per year that .5% would save you $10 LOL

True enough. And I'm not saying to turn it into a deal breaker, but it never hurts to ask a simple question. Due to compounding, that half percent would make $648 difference in the total amount each member would pay over ten years and $2,986 difference over 20 years. Multiply that by 10 or 12 members and it might be worth asking, "Would you consider 2.5%?" Worst he can say is no. Or maybe hell no.

[kyle1974]

Originally Posted by M16

Supply and demand. When you have a hot commodity maximize your profit. Lots of people looking for a lease.

that's also an excellent way to foster long term partnerships with people who will only think of the best thing for the property year to year.

[meltingfeather]

Originally Posted by TENRMORE

Thoughts?

Pay it or move on... pretty simple.
He could not say anything and just tell you every year what the new price is.

[basschump]

A good working relationship with a landowner and a contract are worth their weight in gold. So much better than a huge unexpected jump (eg 25%) without expecting it. The nominal increase protects you as much as the landowner.


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[CrossTimbers]

I'd counter with a CPI increase, that way it holds with actual inflation.

[Graysonhogs]

Originally Posted by gfulton

Are the deer's horns getting three percent larger every year?

Trick question, deer don't have horns.

[Graysonhogs]

My take: Pay the 3% and be done with it. If you don't like the lease, don't. Somebody will take it at that price before you leave the property with your stuff. I wouldn't "counter" with anything. You aren't in mediation and you might just pizz the ol boy off.

[Hayek'sPupil]

Originally Posted by Snakelover

On average over the last five years or so, 3% is a little inflated for Texas. I might counter with 2.5%. But I think his reasoning is sound. In the long run, it might even help keep someone else from scooping the lease out from under you. Personally, I wouldn't be opposed to it, assuming it's a good lease and a good landowner.

"In the long run we're all dead" - John Maynard Keynes (who did not seem to mind inflating the economy)

[Hayek'sPupil]

Originally Posted by TENRMORE

So we are in our Third year of a three year contract and the lease owner said he is going to go up 3% every year from now on. Its not that much per member but I have been on long term leases before in the hill country and never had this brought up to me. He said everything increases per year, which I agree, We have passed on some young deer, because we want to be there long term. Seems like we have a good relationship with the land owner...

Guess pay it and move on until we can't pay anymore or we think its not worth it...

Thoughts?

Assume, like others, its what this lease owner considers inflationary pressure. This is not the correct definition of inflation. Inflation is not simply a rise in the general price "level". Inflation is a price distortionary process brought on by the expansion of money and credit and/or government spending to stimulate the economy which serves to misallocate capital by manipulating the incentives on long and short term investments. It is not just a rise in the price level though that tends to occur down the road but not always.

https://mises.org/wire/inflation-beginners

[lovemylegacy]

The landowner is being up front with you. That's a change from what I read on here and from what I have experienced myself. A 3% increase per year is less than what we have experienced I can tell you that. You actually have the advantage of planning into the future to the point that it will be to expensive or exceed its personal worth. If you are happy with the lease and its worth a 3% value increase per year, keep it.

Im assuming the 3 year contract was a set price?

[TxDispatcher]

Originally Posted by TENRMORE

Thanks for all the thoughts and ideas ...its worth 3% for me not to move all my stuff but I have other members to deal with. You just have to put yourself in the land owners shoes sometimes to justify the cost increase.

I bet you won't have a problem filling the spots should guys decide to leave

[warrington]

Property taxes go up that much each year

Remember when one group leaves a lease the price of the next leasee is usually 15% highee

[TENRMORE]

Originally Posted by lovemylegacy

The landowner is being up front with you. That's a change from what I read on here and from what I have experienced myself. A 3% increase per year is less than what we have experienced I can tell you that. You actually have the advantage of planning into the future to the point that it will be to expensive or exceed its personal worth. If you are happy with the lease and its worth a 3% value increase per year, keep it.

Im assuming the 3 year contract was a set price?

Set price for two years with possible 3% increase the third year...which he is going to go up the 3%. Th new contract will 3% per year but we haven't talked about years or length of contract.

Thanks again for all the advice...and being positive about most comments, I've seen these threads turn for the worse...