Investing in Pine

[BlackMan]

Hey guys my wife and I been thinking bout buying 150 acres and planting Pines on maybe bout 20-50 acres.Would this be a good investment down the road?Or should we plant pecans?Any advice would be appreciated
*southGaregion

 

[Milkman]

A couple of questions might give posters better information.

What type terrain is the land now?

Do you plan to hunt this land?

 

[georgia_home]

the land is good. the returns mediocre.

 

[Timberman]

Well I don't know how the returns compare but I can promise you growing pines will be much less work than tending pecan trees

 

[JackSprat]

Well I don't know how the returns compare but I can promise you growing pines will be much less work than tending pecan trees

This.

Plus you can get a lot more free or low cost help from the Forestry Commission with pines.

 

[Forest Grump]

Pecans will need to be irrigated, & maintenance cost will be higher early on, but the financial returns will be much higher over 30-50 years from pecans vs. pine trees. Pecans also need to be pruned initially to get the best shape & productivity out of them. Then you have to mow, fertilize, & pick up limbs as well. If you have grass pasture where you want to plant, you need to kill the grass before planting pines.

The problem with a small tract of pecans is you will have to contract with someone to spray, shake & pick them; that's not enough to pay to buy all the equipment. A timber tract that small is hard to get thinned because it doesn't pay the guy to come for such a small return; they'll clearcut them, but thinning you may have trouble with.

 

[Forest Grump]

For a tract that small, you might consider fruit trees or chestnuts; they produce income earlier & are easier for the small producer to manage than timber or pecans. For aesthetics & hunting, oaks are low maintenance.

 

[JackSprat]

Pecans will need to be irrigated, & maintenance cost will be higher early on, but the financial returns will be much higher over 30-50 years from pecans vs. pine trees.

Not trying to be argumentative, but I'd like to see the figures on that. In 50 years you could pretty reliably have two harvests of pine, the return mostly dependent on the current market price.

With pecans, you have to include the costs of maintenance, occasional crop failure, and yearly market conditions.

Obviously someone thinks there are greater returns in pecans, because there are groves all over SW GA.

OTOH there are no large corporations owning hundreds of thousands of acres of pecan groves.

Just would be interesting in seeing those figures over the last 50 years.

 

[buc101]

I agree with Forrest. I have 60 acres and trying to get someone to thin them has been fruitless. Lots of promises, but so far no one has showed up, and I get it. Doesn't pay to bring out the equipment unless I happen to catch them cutting other trees in the area.

 

[misterpink]

Some assumptions:
150 acres
Land cost $1,000 per acre (this is very cheap land)
Total investment $150,000.
vs.
$150,000 investment in a basic S&P500 total market fund returning on average 7% per year.

In 50 years your stock investment will be worth $4,418,000.

Will your 150 acres ever be worth $4.4 million no matter what kind of trees you plant?

Don't invest in tree land to make money. There are MUCH better investments.

Only buy ag / tree land if it makes you happy, never to make you money.

 

[elfiii]

I agree with Forrest. I have 60 acres and trying to get someone to thin them has been fruitless. Lots of promises, but so far no one has showed up, and I get it. Doesn't pay to bring out the equipment unless I happen to catch them cutting other trees in the area.

Yep. Loggers want to go somewhere, set up and operate for a good long while. The cost of breaking equipment down and moving to the next location is expensive. Thinning 50 acres is about a one to two week job and there isn't much money in it.

 

[livetohunt]

Land is not a great investment in Georgia unless you buy it very cheap IMO..I look at it more of putting money in the bank, even though it's obviously not a bank...If you hunt or use the land for recreation even better..For land in Georgia pay cash for it, and expect a 4% average return in timber. If you finance the land, you will almost 100% be taking a loss on the purchase.

 

[ucfireman]

Some assumptions:
150 acres
Land cost $1,000 per acre (this is very cheap land)
Total investment $150,000.
vs.
$150,000 investment in a basic S&P500 total market fund returning on average 7% per year.

In 50 years your stock investment will be worth $4,418,000.

Will your 150 acres ever be worth $4.4 million no matter what kind of trees you plant?

Don't invest in tree land to make money. There are MUCH better investments.

Only buy ag / tree land if it makes you happy, never to make you money.

I always love the 7% return assumption.
That said most people dont have 150k laying around to invest at once. You can finance the land purchase.

 

[shdw633]

I always love the 7% return assumption.
That said most people dont have 150k laying around to invest at once. You can finance the land purchase.

Actually, most annuities are guaranteeing 7% so that's not that far fetched in todays market. The catch would be whether it would hold up or average that 7% over 50 years.

 

[Triple C]

For all that have stock market investment accounts, on a day when the market is up, how often do you hit the refresh button to see how much you've gained that day? Prolly a lot. Not so with land. I bought land in 2011 and consider it one of he best things I've ever done. I can walk on it...hunt on it...hide Easter eggs and Christmas trees on it for the grandkids to find, manage and harvest the timber, cook meals every weekend I'm there, host family gatherings, holiday celebrations, etc. The list goes on. I don't consider it as much of an investment, but rather a lifestyle choice that producers returns in a way that my market investments can't produce...priceless memory maker moments. And, I'll pass it down when I die. It's worth more today than it was in 2011. It will producer income from future timber harvests. We'll have many more family gatherings and hunt multiple varieties of game while I'm alive, Lord willing. After I'm gone, the kids can keep it or sell it. I know they will get much more than I paid for it.

For individuals, my advice is to buy rural land for the intrinsic, almost non-measurable value rather than an investment vehicle. This pic of grandkids after Thanksgiving dinner searching in the woods for the hidden Christmas tree kinda sums up the intrinsic value of rural land ownership...Priceless.

 

[jam]

Hey guys my wife and I been thinking bout buying 150 acres and planting Pines on maybe bout 20-50 acres.Would this be a good investment down the road?Or should we plant pecans?Any advice would be appreciated
*southGaregion

Just some info from one of my personnel experience growing 35 acres of slash pines. Very good south ga land, cultivated field planted in 1995. Harvested pine straw on contract per acre not by the bail, clear cut timber in 2012. Total of 17 years growth, timber sale plus straw harvest over 17 years was $142,675.00. Had time invested in keeping them mowed the first five years but then pine straw harvester maintained after year five. Not any other expense other than the initial setting of trees and property taxes. Understand this was very good well maintained cultivated land prior to setting timber. This info does not include the purchase price of land. I definitely like to have some of it all as for as investment, stock, cash, and by all means land. They are not making anymore of the land, you can always buy stock or CD'S. Diversity is important, but you got to want the land and find the right track and the price is a big factor.

 

[maker4life]

If you plant pines and thin twice, you can expect 25-30 tons/acre of pulp then a mix of pulp and chip and saw. When it's ready for clear cut you get 80 tons/acre of sawtimber.

At current prices that would gross you $2,650/acre over the life. I'm not a consultant so those numbers may be off but I think they're pretty close.

Figure about $190-200/acre for site prep and planting. It's a sound investment that you'll also be able to enjoy recreationally as well.

 

[elfiii]

For all that have stock market investment accounts, on a day when the market is up, how often do you hit the refresh button to see how much you've gained that day? Prolly a lot. Not so with land. I bought land in 2011 and consider it one of he best things I've ever done. I can walk on it...hunt on it...hide Easter eggs and Christmas trees on it for the grandkids to find, manage and harvest the timber, cook meals every weekend I'm there, host family gatherings, holiday celebrations, etc. The list goes on. I don't consider it as much of an investment, but rather a lifestyle choice that producers returns in a way that my market investments can't produce...priceless memory maker moments. And, I'll pass it down when I die. It's worth more today than it was in 2011. It will producer income from future timber harvests. We'll have many more family gatherings and hunt multiple varieties of game while I'm alive, Lord willing. After I'm gone, the kids can keep it or sell it. I know they will get much more than I paid for it.

For individuals, my advice is to buy rural land for the intrinsic, almost non-measurable value rather than an investment vehicle. This pic of grandkids after Thanksgiving dinner searching in the woods for the hidden Christmas tree kinda sums up the intrinsic value of rural land ownership...Priceless.
View attachment 944280

I'm part Irish.

 

[JackSprat]

Another factor in the pecan vs. pine discussion is the tax treatment over 25 years.
Both property and income.

Pines are treated very favorably by both.

 

[misterpink]

I always love the 7% return assumption.
That said most people dont have 150k laying around to invest at once. You can finance the land purchase.

7% is the historical return of the S&P 500 adjusted for inflation over the last 90+ years.

If you are financing $150,000 over 20 years at 5% you will pay $90,000 just to borrow that $150k. You are $240,000 in the hole before you ever pull a dollar back out.

I know "The American Dream" is to own a little slice of heaven.

In my profession, I've seen too many land rich people that basically get it taken away from them by the bank or sell too cheap to the wolves because they are up against it. I guess the title "Investing in Pine" hit a nerve. Just trying to spread some knowledge. Most finance folks agree that Pine Land is not the best investment for most of us.