Is this a money losing idea or does it make since?

[Robert R]

There is land for sale all around us pretty cheap.  Within 90 minutes of home, I can buy forested land for less than $900 per acre (sometimes about $500 without all weather road access).  What I was thinking was, if I buy a 40 acre or so tract and log it on the weekends of the high value trees and clear cut a lane and building site, I ought to at least be able to sell it for what I paid if not more and also have the value of the timber I removed.  I am sure I am overlooking something here.  Has anyone tried this.  Did it pan out?  It seems to me like it ought to be a wise investment, especially with the timber mix in south central missouri consisting of a lot of oak and walnut.  I watch adds in the paper every week that seem like giveaways compared to property in my immediate vicinity at $2,000 an acre and up for unimproved, infertile, used up crop ground.  If my wife would move away from her mother, I'd already be gone!!

[etat]

I have no idea how to answer your question, but I did find some land for sale. 


???
own a piece of sherwood forest
???

[Arthur]

Good idea if you have the cash.  If your buying by credit you need to add that as a cost.  Over 25years could cost you twice the price.

Most big developers do this here.

buy 100acres log it, subdivide, build houses and sell at 1000% profit

arthur

[Ron Wenrich]

Let's see.  You want to buy ground, high grade it, then dump a piece of poorly managed forestland on some other unsuspecting soul.  It works only if you can dump the land.  If not, you're stuck.

I've seen land that looked like it was cheap.  I have to ask myself several questions.  Why haven't local mills or loggers cut the high grade timber or bought the land?  I always suspect I'm not the first one to find it, especially from an ad.  Its cheap for a reaon.  There are very few buyers.  So, when I'm done with it, how will I be able to sell the land.  If it was an unattractive investment for someone else with timber, how will I make it more attractive without?

I do know of guys that have bought land for more than the timber was worth.  They are still holding onto land, since there are no buyers.  They pay taxes every year and use it for hunting, so there is no loss to them.  Their land is sitting in an area that is highly desirable, from a buyer's standpoint, and still have difficullties selling it.

Land is cheap for a reason. 

[Rod]

it might work.I've bought cut over timber land form loggers who couldn't sale it after they logged it and I've done ok.

And most of time the taxes on the cutover timber land is cheap so it doesn't cost to much to hang onto it.

Also the trees will keep growing so you will be making $$ that way.I live in West Virginia and you can't find much cut over timber land for sale anymore.

The fostors say the timber is growing back faster hen they are cutting which seems alittle hard for me to believe,cause everyone is cutting just about everything around here.Even he Beechs and the Hemlocks.

Tie prices for 7x9x9' are over $20 now.

[Jeff]

First thing I thought too.  High gradeing it and dumping it. Maybe a way to make money, but shameful to mismanage another forest for a buck in my view.

Big difference between the terms valuable and cheap.

[WH_Conley]

It's done around here all the time. A friend of mine bought a parcel of land and just hung on for about ten years, til the slash went down enough to get through, and cut anything that was still alive but damaged from the logging, leaving the young stuff. He has a very nice looking young forest now. Will be some very nice timber in a few years. Very long term investment. Not much way a person could do it on borrowed money.

[Firewood Farm]

At those land prices, this could work very well. And if you don't want to high grade it, just clear cut it, which is a recognized regeneration technique.

It should be fairly easy to inventory the properties to see if timber value can justify the price.

I have seen this done around here quite often because most buyers simply don't account for the value of timber when considering land value. It's like anything else, just go into it with your eyes wide open and you should be OK.

[OneWithWood]

I think you could do better by not high grading the property.  Take some time to learn a few things about forest management.  What does the understory look like?  Is there enough young growth of oak, hickory, walnut that could be released when the overstory is harvested?  Perhaps there is some long term value you are overlooking.
High grading a property or otherwise destroying the environmental potential of land is the process of selling our future for a quick gain today.  Too many are doing that now.  Please do not join in the destruction, but rather look to build a better more sustainable future.

[Robert R]

Thanks for the input.  I am new enough to this not be "up" on the lingo.  I would never rape the landscape--my neighbors thinks I am a bit freakish about how I manage my farm already.  I would definitely use and follow the advice of a forester.  What I am looking at is improving a stand while at the same time profiting from the marketable trees and providing a ready made building site.  Most of the weekenders I know won't consider a place if it isn't already prepared to either roll in their RV or start building on.  Should have worded my question more thoughtfulll to begin with.

[Bro. Noble]

Robert,  If you keep in mind what OWW just said and think back on what you said earlier-------that you would move to the land if your wife were willing.    Maybe you need to look closer to home.  Consider buying some nice timberland close enough to home that you can live there and still please your wife.  Doing TSI work can be a very good investment and make a little cash immediately as well.  If you enjoy that kind of life,  that's what's most important.  You might be better off with better land close to home that you can live on or near.

I used to work for the extension service in the Kaysinger area and am familiar with the timberland there as well as in south central Mo.  where I now live.  There is a lot of difference in the timberland and realators can make 'post oak flats' sound like a rain forest.  There is some good timberland in Cedar,  St Clair,  Hickory and Benton counties.  It may cost a little more in Vernon and Bates counties,  but I'm sure you can find some there too.  I don't think you will find the prices a whole lot less in the our area for the same quality of timberland,  we just have more of it.  

Learn your timber and keep your eyes open.  Be patient and look for good buys close to home.  Over the years,  we have bought some tracts that join us and some have paid off pretty well by doing selective cutting.  None of them were advertised in the papers.

[rbjones03]

I agree with OneWithWood, the long term investment is where the land will make you money. Small timberlots or large tracks can and should be managed to insure a long term yield. If you can get 10 logs (18" DBH x 16' international 1/4 scale = 230 bdf )  an acre of decent sawable timber per year/ per acre  thats 2,300 bdf/ acre X 40 Acres = 92000 total BDF . depending on the price of lumber and your time, let's say .50 /bfd thats 46,000 / harvest. You can let your investment grow or reap quick rewards. I would personally perfer long term returns because each harvest is going to return better and better timber just by the act of effective management.
Hint cut the trees you don't want first.  IMHO.
:P

[donald_harby]

What part of Missouri do you live in?  There is no $500/acre in my area.

[Firewood Farm]

Robert,

I checked my figures and here is what we did a few years ago. We bought 31 acres of timber and immediately did a selective low-impact harvest. The majority of the wood harvested was yellow poplar (tulip trees) sold for pulpwood. We netted $660 per acre on the harvest and never lifted a finger, except to sign the contract. We were in full control and could accept or reject each tree selected for harvest. After that, the entire operation was carried out by the logging company.

So yes, given the right conditions, what you are suggesting is possible and even profitable, and can be done within the confines of a well-managed forestry plan.

Hope that helps,

Joe

[Rod]

another thing is if you put a house on the timber land and live in it for the last 2 years before you sale the place,the tax laws say if you make $500,000 profit or less on it you wont have to pay any captial gains.

[Rockn H]

One thing to check on is access.  Timber buyers here often buy land locked land with access for logging only.  The land is cheap because there is no legal right of way to the property.  We bought 80 acres because the maps did not show a right of way, but the county had one recorded.  Once its there its there.  No one wanted it because it had recently been thinned and the realtors need access. ;D