Reply to What does it cost to maintain a hobby farm?

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[quote=Anonymous]I would recommend buying a farm with land and then renting most of the land to a larger farm.  The land rent likely won't cover the full cost of its ownership, but it will pay most of the taxes at least.  Then, start small with whatever you can do on your own, and scale up over time as you see fit. If you decide you need more land, just stop renting the portion that you need.  Don't start by hiring an employee, figure out what you want to do yourself and then only hire as you grow over time.

Farming has large fixed costs in equipment, and it's very hard to cover those fixed costs at small scale.  Small (non-hobby) farms can hang on for a long time as their capital depreciates, but new investments are rarely NPV positive.  That's why you see so many small farms exit when the owners retire and no one wants to take over.

The best thing you can do is make as many of your costs variable as you can.  Hence the land renting scheme.  It also helps a lot if you can fix up old farm equipment yourself, or know someone who can.  Buy used equipment from larger farms or farms that are going out of business at auction and then keep it running.[/quote]

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