Year one costs on a 60 acre timber parcel, plus the line I think I'm missing

The culvert number is the one I'd push on. 3,500 to 6,000 is a wide spread and it usually means nobody has looked at the ditch. Ask what pipe diameter, whether there's headwall, and whether the county has to approve the driveway connection, because in a lot of counties a new entrance onto a public road needs a permit and the pipe size is specified by them, not by your contractor. Then add the internal road. A gate at the front is useless if you can't get a log truck to a landing, and building a usable landing plus 800 feet of all-weather road is easily five figures on wet ground. That cost doesn't hit you this year, but it hits you the year you harvest and it comes straight off your stumpage.

Basic question because I'm reading everything twice: what does thinning actually mean here? Is it a harvest you get paid for or a cost you pay to keep the trees healthy? Tally's post treats it as income and I've seen it described as maintenance elsewhere and I can't tell which.

@juniper it's usually both at once. You remove the smaller, crowded stems so the remaining trees put on diameter faster, and the removed material sells as pulpwood. Whether it's net positive cash depends on volume per acre and how far the mill is. Thin a young stand far from a mill and you can genuinely pay for the privilege.

@tally the 610 tax bill is your biggest unknown by a mile. Most timber-producing states have some form of current use or forest land classification that assesses on productive value instead of market value, and the enrollment mechanics differ by state, including whether the classification survives a sale, whether you have to re-apply within a set window, and what the penalty is if you ever convert the land to something else. Call the assessor's office in that county and ask what class the parcel is in and what happens on transfer. If it's classified and you miss the re-application window, that 610 can become several thousand and your whole carry math changes. Confirm it in writing before closing.

I came into this room hoping to find income and this post is a good cold shower. 11,500 out, 600 in, for years. That's not income, that's a savings plan with trees on it.

@marlow that's kind of the point though? The value compounds in the standing inventory whether or not anyone is paying you cash. Which is fine if you have a W2 that covers the carry and a decade you don't need the money. It's terrible if you wanted a check. Tally, I think your real question is which of those two people you are, not which parcel to buy.

I'd add closing costs to your up front line. Title work, recording fees, and any transfer tax, and transfer taxes vary a lot by state including some that don't have one at all, so get an actual estimate for your state rather than a percentage from a blog. On a 145k purchase that's not enormous but it's real and it isn't in your list. Also the first year of insurance is often paid at closing, so your 480 is part of the 47,000 rather than on top of it.

Fourteen year old pine on decent site index is somewhere around first thinning age depending on how it was planted and whether it's ever been thinned. Get the cruise before you decide it's dead money for years. I bought a tract once that the listing described as fifteen years old and the cruise found a block that had been planted five years earlier than the rest, and that block paid the taxes for a good while.

On the bigger question, I've held land through two stretches where I thought I'd made a mistake, and the thing that made it survivable was that the carry was small enough that I never had to think about it. 11,500 a year against a W2 is a real bite right now. Ask yourself what it looks like the year you lose the W2, because the whole advantage of these assets is that you get to choose when to sell, and debt takes that choice back.

Coming from small multifamily this reads very strange to me, and I mean that neutrally. Every unit I own teaches me something within thirty days. Your parcel teaches you something in eight years. Different game entirely.

One concrete thing: on my buildings I keep a reserve line separate from operating. Do that here. Storm damage, a fire lane, a boundary dispute with the neighbor whose fence line disappeared. You will spend money you didn't plan on and you have no rent roll to absorb it.

The missing fence line would worry me more than the culvert. If three corners are described off something that no longer exists, the survey might come back with less acreage than the listing, or with a neighbor's barn on your side. Make the survey a condition of closing, not something you do after.

Your budget looks honest to me, which is more than most first budgets. The thing I'd change is the financing. You're borrowing at something in the 7s on an asset that produces nothing for years and whose value moves in decade-long cycles. That's a mismatch. Either buy fewer acres for cash or find a longer fixed term.

@verity this is the trade I keep circling. Half the appeal of timberland is that you can defer harvest when prices are soft. Debt with a rate reset takes the deferral option away, because the year the loan reprices is not necessarily a year stumpage is strong. Tally, ask your lender explicitly what happens at reset and whether prepayment from harvest proceeds is penalized, and get the answer in writing.

On the lending mechanism, raw land and timberland generally don't get the terms residential does. Farm Credit System lenders and some regional banks do this kind of paper and structures vary widely, including longer amortizations, balloons, and rate resets at set intervals. Terms move, so get a written term sheet rather than a verbal quote and read the covenants, because some timber loans restrict harvest without lender consent or require proceeds to be applied to principal. That clause alone can undo the flexibility everyone in this thread is telling you is the main reason to own trees.

If you do the recreational lease, treat the lessee like a tenant. Written agreement, proof of their own liability coverage, clear rules on structures and vehicles and who's allowed on the property. Hunting lease terms and liability exposure differ by state, including recreational use statutes, so have someone licensed in that state look at your form. 600 a year is not worth an uninsured guest.

2,400 an acre for mixed pine and hardwood tells me almost nothing without knowing what's standing. In the rural markets I watch, that same number covers everything from cutover to a good sawtimber stand. Also worth knowing: roughly a dozen states don't make sale prices public at all, so depending on where this is you may not be able to pull comps yourself and you'll be relying on a broker's word or a paid appraisal.

The number that jumped out is 2,800 for a cruise and management plan. That's the cheapest line in the whole budget and it's the one that decides whether the other numbers mean anything. Spend it before you're under contract if the seller will allow access.

The recurring cost people forget is the one that requires showing up, and it took me five years in a service business to see it. Firebreak maintenance, mowing the road, checking the gate after storms. Either you drive out there several times a year or you pay someone. If the parcel is three hours away, price the trips. That's a real line and it's zero in your spreadsheet.