A Forest Of Your Own | Chapter 4 | Shopping for a forest

Throughout this book, I certainly don’t hide my opinion that owning or managing a forest is one of the greatest expressions of earth stewardship. I wholeheartedly encourage you to go out and acquire your own tract of forestland and put your conservation ethic into practice. As my mom always says, “Land is a good investment because they’re not making any more of it.”

My family owns a tad over two hundred acres of forestland that we manage as much as a legacy investment as we do for conservation benefits and recreation. Our forests in Washington carry on the tradition of land stewardship that my parents started in Minnesota—providing firewood for our home, recreational activities like camping and hiking, and homes for all creatures great and small. We’ve done what good farmers do—we invested in good soil. As a result, the opportunity to manage these lands as a natural capital endowment for ourselves and future generations is hard to ignore.

I’m confident that, with good management, within the next ten to fifteen years we should be able to generate, conservatively, $40,000 of gross logging revenue each year from our land, while continuing to increase both timber volume and value . . . and do this indefinitely. After deducting the costs of logging and land stewardship (at least half of the gross revenue), that obviously doesn’t provide a salary to live on, nor does it even cover annual tuition at a land-grant college these days.  However,  it is a good basis for a retirement fund, and it will certainly help sustain our health and well-being.

Along with a periodic dividend, my family gains incalculable value from all of the other benefits a forest provides. What other investment can you walk through, breathe in, repair your spirit, or practice a stewardship ethic with (a practice I feel all humans are inherently compelled toward)? My bias as a forester notwithstanding, sharing the value of forest stewardship from generation to generation is one of the best gifts we can bestow on humanity. A stewardship ethic breeds compassion for life—all life in its many forms and manifestations—and compassion is a virtue our world sorely needs.

WHY OWN A FOREST?

The path of a forest steward is a very personal one, yet there are many values that unite us in this shared ethic. Many of us have a personal connection with forests, one that may even stem back to childhood experiences. When you ask yourself what you love, appreciate, or value about a forest, what comes to mind?

Do you value forests for their . . .

• Biodiversity, fish and wildlife habitat, and other conservation values?
• Beauty, grace, majesty, or similar aesthetic, recreational, or spiritual values?
• Ability to produce clean air and water, sequester carbon, and other ecosystem services?
• Valuable forest products, ability to provide stable, long-term income, and other economic values?
• Legacy value, and the role they play in your family’s livelihood and multi-generational estate?

You may have other values or may articulate yours differently. Owning a forest need not be a daunting task even if you have no prior forest management experience. Across the Pacific Northwest, there is a bevy of private and public financial, educational, and technical assistance programs that can help forest owners and managers understand how to better manage their land and offset the costs of forest restoration activities, as we will discuss later in this book. Further, forestland that is managed, at least in part, in a manner that periodically produces merchantable timber qualifies for the lowest property tax rate of any land use type. Lastly, there is a community of consulting foresters who can work with you to develop a long-term management plan for your forest and implement any number of forest conservation and timber management activities.

THE SEARCH FOR LAND

I don’t like shopping. At all. But shopping for land is quite a different experience. It’s fun to see what’s for sale, what current forest-land prices are, and how those prices change based on location. How is the land being marketed? What are the sizes of forested parcels for sale? How was the land managed previously, and what shape is the forest in? The internet is a perfect enabler, and a quick search for “forest land for sale Washington” (or Oregon) immediately returns multiple real estate websites that include rural, undeveloped land. These sites have become more sophisticated over the years, and many of the forestland listings now include stand maps and rudimentary descriptions of the forest or timber. This makes armchair real estate prospecting fun and informative, but also possibly misleading. The potential for scams or illegitimate sales raises the importance of working with an agent who can help buyers find legitimate listings and can arrange safe opportunities to view the land in person.

The value of daydreaming about owning land only lasts so long, and then you have to face the reality of what you can actually invest. If you’re fortunate enough to have a cool million dollars or more, then there are plenty of options for rural forestland. However, most rural properties that are on the market are being sold as future residential development sites; therefore, they have a much higher development value associated with them than land that is being sold solely for ongoing forest management. Further, land for sale within an hour’s drive of most urban areas is more expensive than land in the boondocks. Just like buying nuts in bulk at the food co-op, buying land in bulk will net a lower per unit (acre) cost, and any real estate website will quickly reveal the high price variability of rural land.

Financing the purchase of rural land is very difficult. Few banks will lend on land that is not semi-developed (e.g., land that lacks a well, septic system, or foundation), so you may need to be prepared to make a cash investment or seek nontraditional financing. A range of farm credit agencies and organizations provide loans for rural land acquisition, but oftentimes these loans come at higher interest rates than conventional home mortgages and may require at least a 50 percent down payment. A general rule of thumb is that, over the long term, timber volumes and value on the west side of the Cascade Range appreciate at approximately 8 percent annually. This does not include appreciation of the land’s value. This alone is a very reasonable investment while interest rates are low. However, taking into consideration the cost and interest of a loan, on top of stewardship costs, the investment may not make as much short-term revenue as other types of investments.

WHAT ARE YOUR OBJECTIVES?

Being clear on your objectives for owning forestland will help you or your real estate agent narrow the search. We’ve talked about your personal values when it comes to a forest, but what are your goals and objectives for owning one? Prospecting for forestland puts some of those goals to the test—in particular, if they’re at all at odds with each other. So let’s review.

Timber Production

If one of your primary objectives is timber production, you will want to find as productive a piece of ground as possible. This requires an understanding of soils and choosing land with a high Site Class or Site Index. This can mean loamy clay soils, valleys, lower hillslopes, and areas with higher rainfall and warmer temperatures. The most productive forest soils are on the west side of the Cascades—in particular, within the fog belt of the coast. As we describe in Chapter 10, you can generate soil maps online for information on a site’s soil types and productivity.

When considering timber production, ask yourself how patient your capital can be before needing to generate a return on investment. Younger forests are typically much less expensive to purchase than older forests given the lack of immediately harvestable timber. A recently established plantation, for instance, likely represents the least expensive forestland available. However, it also requires a twenty-five- to thirty-year waiting period before seeing a return, as well as ownership and management costs along the way.

Relative to growing and selling trees, size does matter. You will need at least ten to twenty acres if you want to cut and sell trees and generate a dividend check every ten to fifteen years. As property size grows, so does your ability to log more frequently. For instance, with my family’s two hundred acres of forestland, I anticipate commercially thinning some portion of our forest every five years.

Forest composition is also an important consideration. Unless each of the stands on the property is well stocked and growing vigorously, you may either incur short-term reforestation costs or forgo long-term revenue from unproductive acres. Sites with poor tree cover and a lot of brush are very difficult and expensive to transition back to forest.

Keep in mind, however, that there are financial assistance programs available to help forest owners offset the cost of restoring their forests. My family’s Bucoda forest, for instance, has required a tremendous amount of restoration work (e.g., tree planting, invasive species removal, and pre-commercial thinning). Basically, we bought a forest fixer-upper. The relatively poor condition of the timber allowed us to get a great deal on a large tract of land, and funding from both the federal Environmental Quality Incentives Program and Conservation Stewardship Program has covered more than 75 percent of the cost of doing the necessary thinning and replanting to get the forest tuned up and back into good growth. (We discuss this in more detail in Chapters 12 and 13.) This worked well for us, partly because we knew what we were getting into. We knew the site had fertile soils, and we knew how to access the available financial resources. You can do this too.

To Build or Not to Build

Most rural land on the market today is being sold as development property. The trend of moving to the country and building a home has become so popular that even surprisingly remote parcels, or ones that historically were devoted to timber production, are now being touted as future home- sites. This is something to keep in mind if you do not intend to build a McMansion on your land. Most rural land has an inflated “development value” associated with it that dramatically increases the value of the land beyond that of the timber. If you’re looking for land solely for producing timber, or solely for conservation purposes, and don’t intend to build anything more than a tool shed on it, you will want to look for land that is not being marketed for residential development, or land that might already be encumbered with a conservation easement that prohibits development.

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We hope this gives you a place to start and have included more in the book about conservation, recreation, location, roads and access, specialists, taxation, and knowing where to compromise. Please pick up a copy here and join us at this month’s fireside chat and book launch.