I'm contemplating investing in timber land in New England

[clemsonfor]

society of American foresters is our professional organization. This is the big one, that most professionals will belong to. Go to their website, they maintain a list of foresters in each state and list their credentionals. Like the states their licensed to work in as well as if they are CF's of not, which is certified forester if I remember right which is an extra designation if you pass their test, which is just some other thing to put beside your name, im not saying that if one guy is CF and another is just state licensed the CF is better. You have to pay several hundred dollars to take the test which is why some just don't.

 

[Gale Hawkins]

Last week we got to spend some time in southern part of VT, NH and ME for the first time ever and realized timber land was more common than open land like in much of the country. We visited a 55 acre farm in VT that produced the sap for their maple syrup making business/store but did not ask any business details.

Land around here is going for 2-3 oz of gold per acre that makes it hard to buy but people with the money to invest in gold putting the same money into land may make more sense to many. The sad fact is for row cropping one can not see much if any ROI. Many buyers are long time land owners so they are averaging up with profits produced from low cost land they have had in the family for years.

Investing in land today is harder than ever for younger people but if one can make it cash flow traditionally it has been a good way to wealth accumulation. Property tax rates is the wild card as I see it today.

 

[J F]

Property tax rates is the wild card as I see it today.

That.

 

[cmhyland]

OK so lets say you invest in forest land. Lets also assume that you buy 300 acres and the land has not been harvested in the last 10 or 15 years. If you have a 50/50 mix of hardwoods and softwoods what can you expect the income to be from this land? I'm sure there can be a stream of income off firewood. but timber harvesting happens once every 20 years? and when it happens how much wil it bring in?

I'm trying to guage how good of an investment this is?

Thanks,
Chris

 

[WayneB]

Living in southern NH, in a small township we know the value of our land and trees. I would try to figure out the area you desire to purchase land in and then check the towns home page. I am sure you will find there is a Forestry link on the page. When you start cutting trees in our town there is a fee to do so if it is timber wood. I am not sure just what it is, but it is there and the town will want to collect.

A friend of mine is a Forester and travels all over the state inspecting and marking trees for cutting. Selective cutting improves the forest value and preserves the natural beauty of the land. Past history has proven that many "buyer land speculators" come in buy up prime land and clear cut the property.

We are all afraid of that and once the trees are cut there is little or nothing the state forestry department can do to the person. This actually happened on our property where they came in cut right up and over the property line and chipped every bit of the wood for the steam plant.\ leaving the property in very poor shape with water run off problems and very unsightly.

Here are a few links that you might find interesting… Oh and I am not a tree huger just like things to change slowly, very slowly.

Wayne

NH Forest Society

Forest Society: Welcome

NH Board of Foresters

NH BOARD OF FORESTERS

This is the link to our towns home page Once there you can go to the pull down window and find the Town Forest Committee.

Dunbarton Website:

Town of Dunbarton, New Hampshire USA

Town Forest Committee
Town Forest Committee

 

[dave1949]

OK so lets say you invest in forest land. Lets also assume that you buy 300 acres and the land has not been harvested in the last 10 or 15 years. If you have a 50/50 mix of hardwoods and softwoods what can you expect the income to be from this land? I'm sure there can be a stream of income off firewood. but timber harvesting happens once every 20 years? and when it happens how much wil it bring in?

I'm trying to guage how good of an investment this is?

Thanks,
Chris

It takes some professional work to answer that question. But, check out this chart of stumpage prices in Maine, 2011:
http://www.maine.gov/doc/mfs/pubs/pdf/stumpage/11stump.pdf

The previous pages in the pdf give definitions. (MBF is 1000's of board feet). Stumpage price is the value to the owner of standing trees. It varies based on many factors, which are defined in the report.

These numbers are derived from Harvest Notifications, a requirement in Maine for commercial wood cuts.

 

[vtsnowedin]

Every lot has it's own individual history and potential. For example a lot that abuts mine of about 150 acres was purchased twenty-five years ago by a banker from Boston. he had it heavily cut getting most of his initial purchase price back immediately then went through the planning and approval process for current use and the plan was to just let it grow for twenty years. In the mean time he has built a rather nice house they consider a camp and a pond and has vacationed and hunted on the property for years while property prices tripled. Two years ago a wind storm made a mess of the wood lot and a salvage operation gave it what amounted to an eighty percent cut. and I'm sure the plan is to let it grow for another twenty five years. The Bankers sons have a nice piece of wealth that costs them little to maintain beyond the taxes on the camp and two acres. They probably got FEMA money on the salvage cut so made out OK even on that.

 

[keegs]

What about renting?

I've had many offers from local farmers to rent some or most of my property to farm potatoes, soy, wheat or to raise beef. For farming purposes in northern ME where land is plentiful and cheap you can expect rents to be about $50. per acre per year.

There's a cost though to putting up fencing, animal odors, noise, some loss of privacy, exposure to chemicals ...etc. that might put some folks off to the idea.

 

[dave1949]

Oddly enough, timber value is not the leading reason people purchase/own wood lands in Maine in the 20-200 acre sizes. They place more value on outdoor recreation, habitat, conservation, solitude, green space, hunting, etc. It worries the forest service because it represents a major shift in what people expect the land to produce and feed into the wood-related businesses. Maine is ~90% forested and state-wide, the harvest is below the replenishment growth rate.

I am probably a good example of that. I don't expect to ever make a dime off my 150 acres from timber sales. It has been high-graded at least twice in the past 50 years, it will be a long time and a lot of work before it becomes the woodlot it could be. It won't happen in my lifetime. But, I didn't buy it with any intention of getting into timber sales. And I bought it at a price that reflects its degraded timber production value.

Developing and maintaining productive forest is really a multi-generational endeavor I think. Eventually, with the right care and time, the land will reach the point where every harvest is bringing in premium payments due to the quality of the trees and promotion of the more profitable species. Very few smaller private woodlots are going to get that treatment because someone has to work essentially for nothing for the first 30 years to reach that stage. How can that be sustained other than as an expensive hobby?

 

[forgeblast]

I have a place near me that put up deer exclusion fencing to protect their wood lot.
Clear cutting is an option, and many times a good option for a wood lot, but here if I was going to do that I would be left with beech and poplar. The deer would eat everything else to the ground.