Strategy 85 of 107 · new for the five-year plan
Lease acreage for a solar or wind project
What it is
If you own open, flat land near power lines, developers may offer a 20 to 30 year lease.
Steps
- If you own open, flat land near power lines, developers may offer a 20 to 30 year lease.
- Have an agricultural or real estate attorney review payment, escalation, removal bonds and taxes.
- Get lender consent, and send each yearly payment to principal.
Repeat: Yearly, for decades.
Measure: Yearly lease payment.
Try it in the calculator Enter its amount in "Yearly amount to principal". Add a payoff goal of 5 years to see what is still needed.
Risks
- Long commitment; it limits other uses and a future sale.
- Property tax treatment can change.
- Many offers never become projects.
Who it fits
Grandmas and grandpas (62 and over), Married couples, Higher net worth, with assets, Business owners
Needs
Owns acreage or a large lot
How predictable
Depends on markets or variable rates
A worked example (hypothetical, not guaranteed)
Picture a hypothetical household (grandmas and grandpas (62 and over)). They owe $300,000 at 6.5% with 30 years left. The required payment is $1,896 a month, and that payment, which comes from income, never changes in this example.
They follow the steps: if you own open, flat land near power lines, developers may offer a 20 to 30 year lease.
Suppose it brings $20,000 once a year on principal. The loan would be paid off in 10 years instead of 30 years, saving about $273,169 in interest. To finish in five years, they would still need about $2,356 a month more from other strategies. That is why the five-year sequences stack several at once.
The amount above is chosen only to show the arithmetic. It is not an estimate of what this strategy will produce for anyone. Put real numbers from the fact finder into the calculator.
Sequences that use it
- Five-year sprint: landowner: Land can pay three ways: a lease each year, a one-time bonus or easement payment, and the sale of a lot you do not need.
Sources and more information
- Ohio State University: Farmland owner's guide to solar leasing farmoffice.osu.edu
- NYSERDA: Landowner considerations for solar nyserda.ny.gov
Where to get help
- CFPB: Find a HUD-approved housing counselor (free or low cost) consumerfinance.gov
Related strategies
- 86. Get paid to grow and keep forest carbon
- 88. Host campers or a glamping pad on your land
- 89. Board horses on pasture or in a barn you already have
- 90. Run a licensed adult family home
- 91. Ministers: a designated housing allowance
- 92. Owners of an S or C corporation: get reimbursed tax-free for home office and mileage