Half into pine or all of it into ground that pays cash rent

I've been circling timberland for two years without buying and the thing that keeps stopping me is that the return arrives in one event. If the final harvest lands in a soft market you either take the price or you carry the stand and the taxes for another few years. That's an option, and it's worth something, but it's an option that costs you money to hold.

cobalt, at 47 that's probably still fine. What I'd want to know is who's managing it. A stand nobody thins on schedule doesn't grow the way the model says, and the model is the entire argument.

anchor named the real risk. I'd add the mill question, because two mills inside forty miles today is not two mills inside forty miles in fifteen years. Delivered price collapses when a mill closes and hauling distance eats the stumpage. Before I put money into a fiber basket I'd want the ownership history of those mills and any public capacity announcements.

cobalt, on the comparison itself, I don't think you're choosing between two versions of the same thing. The cropland is an income asset with an inflation link through rents. The pine is a growth asset with a lumpy exit and a recreational income floor. If your capital shows up in irregular lumps, the asset that never produces cash until it produces all of it might actually fit worse than it looks, because your own liquidity is already uneven.

Also get the cruise done by someone who doesn't work for the seller. I've read enough of them to know the volume assumptions do most of the work.

I've been comparing these two exact categories for about a year and the thing that surprised me is how differently the tax and cost side runs on each, which varies by state and needs an actual professional, so I stopped trying to model it myself.

What I can say from the listings I've tracked: timber tracts trade with much wider spreads on price per acre because the standing volume is genuinely different from tract to tract, and buyers who don't cruise carefully overpay routinely. Tillable ground in a given county trades in a tighter band because everyone knows the soil rating and the rents. Less room for a great buy, less room to get hurt.

cobalt, I've hit my ceiling on active deals partly because everything I own demands attention every month. The pine wouldn't. That's the argument I'd weigh heaviest if I were you, and it isn't a returns argument at all.

keystone put it well. I'd only push back on one thing in the original post: the recreational lease isn't a rounding error in some markets. Where hunting demand is strong it can cover taxes, management fees and then some, and that demand has been holding up value in tracts where the timber math alone looks ordinary. Get the actual lease history from the seller, not an estimate of what it should fetch.

Coming from building things, the pine reads to me like a project with a twenty year draw schedule and one payment at the end. I'd never sign that as a contractor and I'm suspicious of it as an investor, though I accept the biology does the work for free.

The cropland at 3 percent doesn't excite me either. What would change my mind on the pine specifically is access. A tract with a hard surface road on two sides and internal roads already cut is a different asset from one where the logger has to build in. That cost comes off your stumpage and nobody puts it in the pro forma.