{
  "slug": "farmland-cash-rent-cap-rate",
  "title": "Farmland Cash Rent Cap Rate Calculator",
  "heading": "Farmland Cap Rate Calculator",
  "category": "financial",
  "url": "https://www.revenuelab.fyi/toolbox/farmland-cash-rent-cap-rate",
  "summary": "Investment return on farmland from cash rent income and land value.",
  "description": "Farmland is often bought partly for appreciation and partly for income, and the cap rate — net rental income divided by purchase price or current market value — is the standard way to compare it against other income-producing real estate or investments. This calculator nets cash rent against property taxes and other landlord carrying costs, then divides by the land value to get a cap rate, plus shows the dollar cash flow after any land debt service so a buyer can see whether a parcel actually cash-flows positively or is being bought primarily for appreciation and tax reasons.",
  "formula": "Net operating income = cash rent − property tax − other landlord costs; cap rate = NOI ÷ land value; cash flow after debt = NOI − annual debt service.",
  "dateModified": "2026-09-30",
  "run_url": "https://www.revenuelab.fyi/api/public/calc?tool=farmland-cash-rent-cap-rate",
  "inputs": [
    {
      "id": "acres",
      "label": "Acres",
      "kind": "number",
      "hint": null,
      "default": 160,
      "unit": null,
      "min": 1,
      "max": null
    },
    {
      "id": "cashRentAcre",
      "label": "Cash rent",
      "kind": "number",
      "hint": null,
      "default": 250,
      "unit": "$/acre",
      "min": 10,
      "max": null
    },
    {
      "id": "propertyTaxAcre",
      "label": "Property tax",
      "kind": "number",
      "hint": null,
      "default": 22,
      "unit": "$/acre",
      "min": 0,
      "max": null
    },
    {
      "id": "otherCostAcre",
      "label": "Other landlord costs (drainage, insurance)",
      "kind": "number",
      "hint": null,
      "default": 8,
      "unit": "$/acre",
      "min": 0,
      "max": null
    },
    {
      "id": "landValueAcre",
      "label": "Land value",
      "kind": "number",
      "hint": null,
      "default": 10500,
      "unit": "$/acre",
      "min": 500,
      "max": null
    },
    {
      "id": "annualDebtService",
      "label": "Annual debt service (if financed)",
      "kind": "number",
      "hint": null,
      "default": 0,
      "unit": "$",
      "min": 0,
      "max": null
    }
  ],
  "outputs": [
    {
      "id": "capRate",
      "label": "Cap rate",
      "format": "percent",
      "hint": null,
      "primary": true
    },
    {
      "id": "totalNoi",
      "label": "Net operating income",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "cashFlowAfterDebt",
      "label": "Cash flow after debt service",
      "format": "currency",
      "hint": null,
      "primary": false
    },
    {
      "id": "landValue",
      "label": "Total land value",
      "format": "currency",
      "hint": null,
      "primary": false
    }
  ],
  "worked_example": {
    "inputs": [
      "Acres: 160",
      "Cash rent: 250 $/acre",
      "Property tax: 22 $/acre",
      "Other landlord costs (drainage, insurance): 8 $/acre",
      "Land value: 10500 $/acre",
      "Annual debt service (if financed): 0 $"
    ],
    "outputs": [
      "Cap rate: 2.10%",
      "Net operating income: $35,200",
      "Cash flow after debt service: $35,200",
      "Total land value: $1,680,000"
    ]
  },
  "how_to": {
    "title": "How to use this",
    "steps": [
      "Enter acres.",
      "Enter cash rent ($/acre).",
      "Enter property tax ($/acre).",
      "Enter other landlord costs (drainage, insurance) ($/acre).",
      "Enter land value ($/acre).",
      "Enter annual debt service (if financed) ($).",
      "Read your cap rate on the right — it updates as you type.",
      "Hit Share to keep the scenario or send it to someone."
    ]
  },
  "scenarios": [
    {
      "name": "Conservative",
      "description": "Lower-end numbers — what if things land soft?",
      "values": {
        "acres": 100,
        "cashRentAcre": 150,
        "propertyTaxAcre": 13,
        "otherCostAcre": 5,
        "landValueAcre": 6300,
        "annualDebtService": 0
      }
    },
    {
      "name": "Typical",
      "description": "Defaults — the most common real-world setup.",
      "values": {
        "acres": 160,
        "cashRentAcre": 250,
        "propertyTaxAcre": 22,
        "otherCostAcre": 8,
        "landValueAcre": 10500,
        "annualDebtService": 0
      }
    },
    {
      "name": "Ambitious",
      "description": "Higher-end numbers — what if things really pop?",
      "values": {
        "acres": 260,
        "cashRentAcre": 400,
        "propertyTaxAcre": 35,
        "otherCostAcre": 13,
        "landValueAcre": 16800,
        "annualDebtService": 0
      }
    }
  ],
  "limitations": [
    "Results are estimates before tax, fees, and inflation unless an input explicitly covers them.",
    "Rates are treated as fixed for the whole period — variable-rate products will drift from this projection.",
    "This is educational maths, not financial advice. Check anything contractual with the lender or your accountant."
  ],
  "faq": [
    {
      "q": "What's a typical farmland cap rate?",
      "a": "Row crop farmland in the Midwest has commonly traded at 2.5-4% cap rates in recent years, which is low compared to most commercial real estate — the difference is made up by expected land appreciation and lower volatility, not current income yield."
    },
    {
      "q": "Why is farmland cap rate lower than other real estate?",
      "a": "Farmland has historically appreciated steadily with limited supply growth and functions partly as an inflation hedge, so buyers accept a lower current income yield in exchange for capital appreciation and low correlation with stocks and bonds."
    },
    {
      "q": "Does a negative cash flow after debt mean it's a bad purchase?",
      "a": "Not necessarily if you're underwriting on total return including appreciation, but it does mean the parcel isn't self-funding on its own rental income, and you need outside cash flow or equity to service debt until rents rise or the loan is paid down."
    },
    {
      "q": "How does this interact with the cash rent vs crop share comparison?",
      "a": "This calculator assumes a cash rent lease structure specifically. If the land is under a crop share arrangement instead, substitute the landlord's expected average net crop share income per acre for the cash rent figure to get a comparable cap rate."
    }
  ],
  "related": [
    "https://www.revenuelab.fyi/toolbox/cash-rent-vs-crop-share",
    "https://www.revenuelab.fyi/toolbox/orchard-establishment-payback",
    "https://www.revenuelab.fyi/toolbox/vineyard-establishment-cost"
  ],
  "license": "CC-BY-4.0",
  "citation": "RevenueLab — Farmland Cash Rent Cap Rate Calculator (https://www.revenuelab.fyi/toolbox/farmland-cash-rent-cap-rate)"
}