The Overhead Costs of Farm Real Estate Ownership

THE overhead costs of farm real estate ownership do not differ essentially from the overhead costs of any other real estate ownership, but there are special features in connection with farm real estate that deserve to be isolated for separate discussion. Overhead costs in farm real estate include interest, taxes, insurance, depreciation, and management. The special features of these items, as they relate to farm ownership, will be discussed later. It should be noted here, however, that although farm real estate ownership in this discussion is to be divorced from farming, we cannot logically divorce the items that make up the overhead costs from the income of the farmer. Whether the overhead ownership is to be considered from the standpoint of one individual farm owner or of a corporation with a large number of farms, the overhead costs will have direct relation to the farming operations and to farm profits. In fact, the subject has become important because corporation farming has been thrust upon banks, insurance companies, and finance corporations that have in recent years made a practice of loaning mortgages to farmers. According to the Federal Farm Board, the number of foreclosed mortgages held by the Federal Farm Loan Bank system in 1929 involves 2,652 farms, valued at 19.6 million dollars. The Joint Stock Land Banks, in addition, have 2,626 farms, because of foreclosed mortgages, valued at 31.6 million dollars. The life insurance companies had investments in farm mortgages on December 31, 1928, amounting to 1.9 billion dollars. No figures are available to show the number of foreclosed

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