For some farmers, the prospect of retiring brings a sense of elation; for others, sadness. Perhaps a mix of both.
It is understandable to feel bittersweet about the whole thing, for it’s not just the way of life you’re leaving, but the land you’ve poured so much time into, the equipment you trusted to help you get your work done, and the community that has supported you throughout the years.
Whatever the specifics of the path taken – whether your health leaves you no choice or the economy has not been kind – everyone finds themselves near the end of their journey thinking about retirement, and the sometimes overwhelming feeling it can bring. As a farmer myself, I have talked to hundreds of farmers going through the same thing, and I tell them what I am about to tell you: Life goes on after retirement – and asking for a little help can put you on the right track.
One of the biggest decisions retirees have to determine is what to do with their assets, both equipment and land. What separates you from those retiring farmers before you is that you now have the opportunity to expose your equipment to thousands of buyers across a global marketplace through online auctions.
Being able to reach buyers can help ensure that your assets are fetching the best value on the marketplace, to ensure you’re in a better spot for retirement. You also have the opportunity to look at different options for your land and make a decision that works for you.
So, the question now is twofold: First, how do you decide which companies to go with? Second, how do you get the most value from your land and equipment?
An online auction company should provide you with everything you think you’ll need when selling your equipment, as well as things you didn’t think about. Be sure to choose an auction provider that will take care of not only your functional needs but your aesthetic ones as well: marketing, listing, collecting, and distributing of sales proceeds.
The company should also be able to point you in the direction of specialists that can accommodate your situation. If you don’t have the time or ability to clean your equipment before an auction, choose an auction company that can provide those services.
If during your pre-inspection of your machines you find something that could negatively influence the buyer, your company should recommend local specialists for repairs. This all takes time, so be sure to start retirement planning well ahead of when you want to retire.
Cover your bases
A connected hierarchy of trust is incredibly important. Between you and the sellers, the sellers and your auction company, your auction company and you. Be completely honest about the state of your equipment. Reputable auction companies will ask for service records as well as conduct lien-checks to ensure trust with the buying community.
Equipment that is accurately listed and supported by documentation lets buyers know that they can trust the seller and, at the end, are bidding on valuable, legitimate equipment, which can help bring in higher bids.
Aesthetic is everything
This may be obvious, but I cannot go without saying it: Well-maintained and clean equipment always brings in more than equipment that shows obvious signs of wear and/or neglect. Sellers can usually garner 4-5 times the amount of cash compared to the amount spent on cleaning, and your representative should be able to recommend specialists or offer to do it themselves.
Make sure the oil is changed, filters replaced, and that the major components of the equipment are in good working order. Aesthetic is key and is a proven way to increase bid caps and buyer attention. So, power wash the engine, frame, and glass. Do a thorough sweep of the interior and detail the instrument panels and replace worn seats, bad tires, lights, or any other amenities that might make the buyer think twice about buying your assets.
For photos or videos, grass should be cut, and unnecessary background items should be taken away. A general rule of thumb is that the equipment delivered should be in the same or better condition than on the day it was listed. So once your equipment is listed, take it out of service as soon as possible.
Doing all these things will net you higher returns and provide you peace of mind.
Real estate means real money
Determining what to do with your property is another key in taking the proper steps towards retirement. Some farmers choose to stay in their homes and sell off portions of or lease their land to other farmers. Others may simply choose to sell or lease all their property.
Find a trusted real estate company or broker who can help you determine the best plan for you, both short- and long-term.
Some farmers don’t live on their farm post-retirement, but instead choose to sell the land with existing buildings on it. Open farmland, on the other hand, is typically saved by retirees, serving as a future source of income. Being leased to renters while managed by a full-service real estate company or broker takes the hassle out of managing land and tenants during retirement.
Be sure to weigh your options with your financial consultant as well as your real estate company or broker to see what’s best for you from a tax perspective, as well.
To condense all the information above: take your time, find professionals you trust, and create a plan. The process can be arduous, but getting value back for your assets shouldn’t have to be.
Finding the right auction and real estate companies that have your best interests in mind is the key, so make sure they are reputable, honest, thorough, and have the resources you need to get the most bang for your buck.