Longterm Timberland Investing

[Luke Jackson]

Hey Everyone,

Does anyone on here invest in land strictly for timber production? I have a couple VRBOs and a hunting cabin in Northern Minnesota and am wondering if this would be a good passive income stream for an extremely long term (generations) buy and hold investment.

You can buy red pine stands (10-40 years old) for $1200-$1500 per acre. Very similar to what Potlatch does, although some loggers have told me they are hurting financial. Overall the current economics of it sucks and land values have declined, which may make it a good time to enter.

I understand that it would be capital intensive and it would not be a get rich quick scheme; but for me it would be very enjoyable being a miniature timber baron so to speak. I could lease out the land for hunting to cover taxes and misc. expenses. I think that to make it feasible you would have to have very little debt. 

Thanks,

Luke Jackson

[Dan Vleck]

Have had timber land in my family for 43 years. Our land appreciation return is 5.6%. Harvesting for pulp and some hardwood and pine has covered all the taxes, but little beyond that. The red pine stands were Christmas tree size when purchased and require lots of thinning before there’s any return. Now the pine thinning provides marketable lumber. Maturity is still decades away. Once mature, the pines will be worth quite a bit. My dad bought the property and my son will likely reap the pine harvest.

We hunt the land, but otherwise I don’t recommend it as an investment in MN.  Other states have trees with more value. Our hardwood, oak and maple, etc, in MN doesn’t market as well as other states. I think it has to do with the winter.