The couple are forever grateful to Ross who provided the cash before his death for a 50% stock and plant ownership in an equity partnership farm lease.
“That was what got us in, we couldn’t have done it without him,” Logan said.
Ross was keen to see Logan, Fi and their then two young sons settled on a farm and working towards farm ownership.
“It was great that he got to see us settled and had a look over the place before he died,” Fi said.
Phil Dowling, a first cousin, also came up with the cash to make it happen. He and Logan have always got along and worked well together.
Phil, along with wife Jo and his parents Gerald and Angela farm sheep, beef and dairy grazers on 1030ha near Ranfurly. When they sold 488ha for dairying in 2010 Phil and Jo looked for new investment options.
They bought into a dairy farm and also bought a 50% stake in a lodge accommodation business at Naseby, as well as the equity partnership.
“I knew they were looking for something and we saw it as something a bit different,” Phil said.
Logan was head shepherd at Linburn Station when he heard whispers about the lease of Longlands Station in September 2011. He’d been on the lookout for quite some time but choice was extremely limited with most of the local farms selling for dairyland prices.
Snow raking at Longlands in winter 2013 is one of many examples when friends and family have been quick to pitch in and help. Photo: Logan Dowling
While there was no one-size-fits-all lease price formula, a percentage of gross farm income, typically 20-22%, was usually fair and realistic.
Establishing a price per stock unit was another method, but could be tricky given the huge variation in stock unit performance on different farm types.
In central Otago for example, price per stock unit could be anywhere from $17-$24 although a high-performing farm with irrigation could push that closer to $30.
Another important determinant of lease price was the amount of capital expenditure the owner was prepared to invest during the term of the lease.
“It depends very much on how much the owner is prepared to spend on capital and development for the term of the lease, if they don’t that should be reflected in the price.”
Irving said there were many standard lease agreements that provided the baselines and could be altered to suit.
Making it work
Tips on making a farm lease and equity partnership work include:
- Communicate – the Dowlings are in regular contact with each other and Longlands’ owner, meaning there are no unexpected surprises
- Be open-minded on the best structure of an equity partnership
- Look for a supportive farm owner-lessor, and
- Minimise expenses.
FARM FACTS
Logan and Fi Dowling, Phil and Jo Dowling
- 50-50 equity partners in stock and plant, and a five-year lease with an agreed three-year extension of Longlands Station, a 2000ha extensive Kyeburn dryland mostly hill-country store lamb and cattle breeding
Stock
- 3400 Romdale ewes
- 800 ewe lambs
- 90 breeding cows
- trading cattle
