Timber land as an investment

Only my experience, but I've recently sold 2 tracts (80 acres and 25 acres), both of which had hunting leases.

We had placed these parcels into a family trust several years ago, so the proceeds went into the Trust. We sold the 80-acre parcel to the individual we had the hunting lease with, so no real estate folks involved.

Over the years, we harvested timber (slash pine and longleaf pine) off of the tracts to reputable timber processors. We used local companies for replanting, underbrush clearing/controlled-burning, and periodic inspection. Both properties were zoned Agricultural (tree farm) and the receipts for all work were claimed against income generated for the property. Taxes were low/modest, and paid annually. Hope that helps ...

Also, as a hassle-free way to invest in timber, I recommend Catchmark Timber Trust (CTT)

What year baw? Dr. Cao still holding it down


(He nailed it, unless you have a monster piece of property the best you are hoping for is to offset operating costs)

What does land go for in the area and what is the timber value? From all my figuring, timber income really doesn’t do much to justify the investment, compared to other investment avenues, as recreational value has inflated land prices. And my figuring is on a hardwood tract that has been managed for prime saw timber production for 50 years. It only pencils out as being better than a savings account and that’s IF you aren’t financing much. The only possible way to justify it as an investment compared to more conventional avenues and recent stock market history is if you derive significant personal enjoyment from it. For example, if your land note is $20k a year, but it keeps you from joining a $15k lease — ok maybe it pencils out better.

Now, if carbon credits take off …

ETA: To specifically answer your questions, you need to do some IRR calcs and understand what type of return you’re really hoping to get, whether this is really an investment, or a recreational endeavor. No one can provide answers that are really significant to your specific area. In my area, land is about $3k/ac and up. Complete wet weather access is a must for me as a buyer. I’ll make money when I sell the land I currently own. The above-average timber value, relative to price, was how I justified the price of this particular tract, but its location and recreational opportunities are what will end up making it a decent investment when I decide to sell, based on the current market.