| Advantages
-Because the buyer already farms the land through the lease agreement, the timing of the transition can be more flexible than if you were selling to an outside buyer.
- In addition, the purchase price can be fixed over time, or a portion of the lease may be convertible to credit on the purchase price.
Disadvantages
From the farmer’s perspective, there may be a few downsides to entering into this kind of lease. For example, the landowner may charge a higher rent in order to cover the value of the option to purchase agreement. In addition, the term of the lease may be constricted, since the owner is planning on selling the land. Finally, if the farmer’s ultimate goal is to own land, entering into this kind of lease will delay the transfer of ownership. Another possible disadvantage to both the landowner and the farmer is that the value of the property may fluctuate over the lease term.
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