I'm contemplating investing in timber land in New England

[jim_wilson]

Off and on over the years I've contemplated investing in timber land. Part of this is just a desire to own land. Part of it's a desire to have something as a retirement savings that won't get destroyed by the government and/or the banking system, part of it is an excuse to get a bigger tractor, etc. I've also spent a decent amount of time looking into what buying farmland and using it for haying would entail - but from what I can read about haying - it's like racing - the best way to end up with a small fortune - is to start with a big one.

Owning land for timber seems like a much more straightforward "investment" - as I can see , even in the worst case - that simply logging the land for firewood would likely produce enough product to cover the expenses of owning the land - and then some (depending on the land itself).

I am located in MA - and the most likely candidates for decent plots at reasonable prices - are in Maine, followed by NH and VT.

I've read a decent amount - but what I'm really wondering is - what advice would people have? What can I do to educate myself on this subject so I can make an informed decision and evaluate properties? From what I have read - timberland investments can be very good ones. I'm trying to figure out what I need to know to determine that.

 

[clemsonfor]

Go to Forestryforum.com. I am a member there but dont frequent it much in the last few years.

They are many good foresters there that can give you details that most here cant give.

That said we have a few foresters here as well as landowners that sell enough wood to give you an opinion.

In the long term (say 50 years) timber returns slightly higher than the stock market would. There is still risk though, you can have tornadoes, insect and fire damage that can leave you with pennies on the dollar for your wood. THere is insurance availible but it is very pricy and most no one gets it.

Fire wood should get your the most money per amount of volume, but it is very labor intensive. The best way to see this profit is to buy the equiptment and find a market yourself. You wont get much selling firewood on the stump as there is so much for those guys to get in secondary wood markets and waste wood.

I say these things as a forester, others may not agree with me, but this is my opinion and its free!

 

[jim_wilson]

Go to Forestryforum.com. I am a member there but dont frequent it much in the last few years.

They are many good foresters there that can give you details that most here cant give.

That said we have a few foresters here as well as landowners that sell enough wood to give you an opinion.

In the long term (say 50 years) timber returns slightly higher than the stock market would. There is still risk though, you can have tornadoes, insect and fire damage that can leave you with pennies on the dollar for your wood. THere is insurance availible but it is very pricy and most no one gets it.

Fire wood should get your the most money per amount of volume, but it is very labor intensive. The best way to see this profit is to buy the equiptment and find a market yourself. You wont get much selling firewood on the stump as there is so much for those guys to get in secondary wood markets and waste wood.

I say these things as a forester, others may not agree with me, but this is my opinion and its free!

Thanks - just from a cursory investigation - the firewood route seemed to be the most secure payoff. From my reading over the years on how much land it takes to supply cordwood for heating - my understanding is that an acre will supply a cord pretty much in perpetuity - barring any of the bad events you detailed.

A cord of firewood around here was going for around $250 this past winter. I've seen acres selling for as little as $500 up in Maine.

I don't see the marketing as much of a problem - around here firewood gets advertised on Craigslist and seems to sell pretty readily.

But yeah - cordwood is the most intensive time and money route though - the only way to make any real money at it - is to do it yourself. That would involve buying a larger tractor than I have now - skidding equipment , a wood processor, large truck and trailer to haul the wood - etc.

Even doing that - I can see the investment paying off - but it would need to become a real business. Which is a problem for me as I already have a full time job so there are time issues. Especially where the land would be a few hours away so it's not something I could just go out and do after work at night.

Thanks for the link to Forestyforum.com - I will go check that out.

 

[dmccarty]

One storm can take out the trees. I could not find a way to insure my trees.

When we timbered we left some of he land alone. We had, and sorta still have, some large hardwoods on that section but we have lost some big trees. The problem is that we have had multiple storms that have taken out many of the large trees. One was a good 36 inches in diameter that in turn took out a couple 24+ inch oaks.

We old our trees at the peak of the market which was dumb luck. The market has not been good for timber in my area for over a decade in comparison to what we sold our trees. The timber markets are localized and what is true in my area might not be in yours.

If you buy land then get a forester our to cruise the trees and establish a basis after you buy.

We bought land with timber and it was a very good deal for us but we looked for years before buying land. The timber side of the deal was not planned but due to the size of the parcel we had to timber to afford the place so I had to learn about the timber business ASAP.

The NC Extension office had quite a bit of online information regarding timber land, issues, and taxes. They have also had classes over the years that have been well worth my time. I would check and see if MA has something similar.

Later,
Dan

 

[dmccarty]

Also check out https://www.sawmillmag.com/app/home/index. They have reports on equipment and timber management.

Later,
Dan

 

[dsgsr]

I think you will find that hardwood firewood in Maine grows closer to 1/4 cord per acre per yr. You may be able to sustain your own use of 6-10 cord a yr. with the proper size lot. But too think you can sustain a firewood biz and not run out would be stretch.

David

 

[J F]

Interesting posts. Never thought about this aspect of investing.

 

[forgeblast]

Storms, invasive insects, invasive diseases, people who come in and cut your timber. Lot of risks. If you were close enough to check on the stand a couple of times a year I would say before you buy any land, talk to a forester. USDA offices up our way have a forester on staff.
I was approached by a "friend" of my neighbor. He was going to cut a bit for my neighbor and wanted to know if I wanted to make some money. I said no, because I had the forester out to do a timberwalk.
He told me about release cuts, and told me about high grading. I have since then taken landowner classes in forests and timber products that they offered.
Well the friend of the neighbor came back before they cut and said they really wanted to cut that they had marked the trees they would take. All high graded cherry, ash, sugar maple, and oak. All I would have been left with would have been beech, poplar, and hemlock, a few maples thrown in. I said no again, and told them if they came on my propety again with out me present, or damaged my trees while they cut I would have them in court.
After seeing the poor cuts they made, pull outs in the middle of logs, barber chairs, I know I made the right choice.
My cherrys after the release cuts I made are growing about a 1/2'' a year, so my 500 dollar cherrys will be worth 1k in 10 years. On top of that the release cuts are allowing my high quality trees to reseed.
Now if you know your not going to touch the forest for a while you could also enroll it in some type of land program. I have 1.3 acres in crep. I planted high value timber trees and recieve a payment every year for the next 15 years to let it grow and not cut. After 15 years I can do what I want with it. If I choose to take it out earlier I can pay back the money that I recived from it. On top of that we have a clean and green program to lower taxes on on developed land.

 

[dave1949]

Some things to keep in mind, the spruce budworm is expected to make its cyclical return to Maine in the next couple of years. Budworm infestations are ramping up in New Brunswick now, that is the pattern and the timing is on track. Spruce Budworm, Eastern United States

The emerald ash borer will get to Maine sooner or later, but it is considered inevitable. Due to the ash borer, moving firewood any distance, county to county, etc. is restricted. Firewood from Mass. is not to be brought into Maine at all. Besides the bug issues, with the price of fuel and equipment, I don't see selling central to northern Maine firewood around the Boston area as very profitable, but I could be wrong.

If I were going to invest in a large timberland, I would want a licensed forester to cruise the property before buying it to get an inventory value and how that inventory stacks up against projected future markets by species. I would avoid spruce/fir stands and properties heavy in ash. In Maine, red oak, white oak if you can find it, white pine, yellow birch, hard/sugar maple are some of the typical best market trees. I would look for land that has decent southern exposure too.

If you want to maximize your investment return, you will need a forester to work with you in any case.

If you are in the exploratory stage of things, check out SWOAM (Small woodland Owners Assoc. of Maine), swoam.org. Northern Woodlands magazine has some great articles from timber to habitat, northernwoodlands.org. The state forest services (Welcome to the Maine Forest Service) are good resources of info.

If the Maine land you buy is timberland now it probably is enrolled in the Tree Growth tax reduction plan. There is a penalty to remove it, and the enrollment follows the land, not the owner. Tree Growth makes sense for large timber tracts but it requires a licensed forester's management plan created and renewed every ten years. There is no cost beyond the forester's fee to entering the plan, just exiting.

 

[clemsonfor]

One storm can take out the trees. I could not find a way to insure my trees.

When we timbered we left some of he land alone. We had, and sorta still have, some large hardwoods on that section but we have lost some big trees. The problem is that we have had multiple storms that have taken out many of the large trees. One was a good 36 inches in diameter that in turn took out a couple 24+ inch oaks.

We old our trees at the peak of the market which was dumb luck. The market has not been good for timber in my area for over a decade in comparison to what we sold our trees. The timber markets are localized and what is true in my area might not be in yours.

If you buy land then get a forester our to cruise the trees and establish a basis after you buy.

We bought land with timber and it was a very good deal for us but we looked for years before buying land. The timber side of the deal was not planned but due to the size of the parcel we had to timber to afford the place so I had to learn about the timber business ASAP.

The NC Extension office had quite a bit of online information regarding timber land, issues, and taxes. They have also had classes over the years that have been well worth my time. I would check and see if MA has something similar.

Later,
Dan

As much as most like to leave all the hardwood or the huge trees, this is usually the worst thing you can do, actually leaving any trees is not a good thing. What happens here in the south is that they turn to lightning rods, and over then next 20 years till a new forest establishes you will slowly loose all those remainder "relic" trees. The other thing is that they get wind thrown very easily as well as more prone to ice breakage. The reason is that when in a forest situation they help hold each other up, sounds strange but it happens every time we thin somewhere. The less dense the final stand ends up being the more prone to "windthrow" it is.

Even professional foresters still leave this and will still do it even without a landowner involved, I personally don't like doing it. If I am to do it I will leave more of a shelterwood situation.

Dan you closer to the NC furniture market and probably more small HW mills but in my area, they cant even use hardwoods the size you talk about, 24" logs are about the top of the range that can be used here, so most large trees including pine are left just because there is not market for them. I leave them before cutting and leaving them on the ground. Difference is that pines can be made into poles when there a large diameter, some mills use what they call rasta head debarkers in stead of the tipical ring debarkers which is really the limiting factor at the mills, its not really the sawheads. A rasta head debarker is a head that shaves the tree as it is in a chuck like on lath, the tree stays and the rasta head moves on a horizontal plane as the tree spins. A ring debarker is a ring that either has knives I think or chains in some cases, and over a certain size the tree cant actually go into the "ring". OK sorry for a totally random rant, but since I wrote it I wont delete it. haha