Is Buying Hunting Land a Good Investment?

Most people think buying land just to hunt on is an unnecessary expense. They squirrel away money in the stock market, assuming it will always be there. Investing your excess income is always a good idea, but what goes up always comes down. When the stock market is high, its time to bleed some of that gain off into more solid investments. Real estate, including land, is a great place to invest.

Is buying hunting land a good investment? Historically, timberland and farmland have outpaced the equities markets in return on investment. Real estate is a good investment because it is just that, real.

A stock is a piece of paper that only has a perceived value that is usually based on nothing. A tract of land that has minerals under it, timber on it and good soil in which to plant crops and produce food will always be very valuable.

It is, at least, a good hedge against inflation and at best, an investment that has made families wealthy. You can’t hunt and enjoy nature in private on anything but private land. Among the many benefits of owning land is the tremendous tax advantages in active timber management.

In this blog post we will explore some things you may not have realized or considered while trying to justify purchasing some land to hunt on. I suggest reading this article about what to look for when buying hunting land that goes into specifics on characteristics to look for when shopping around.  I also have a video on the subject here on my youtube channel:  land buying video

Reasons To Invest in Land For Hunting

Here are a list of reasons to invest in hunting land:

• Land holds its value and can never be worth nothing while most of the corporations you could buy stock in 100 years ago are gone.
• Timber, hunting, farming are activities that will always be, and always going up in value over time (though markets fluctuate).
• The sense of ownership in land is like no other asset – land gives its owner a feeling of freedom and pride.
• If the stuff hits the fan you can have a place to live, grow food and hunt for your loved ones – peace of mind.
• Timberland investment has an historic ROI that is better over time than equities.
• Timber and farmland can reap very beneficial income tax and inheritance tax benefits and produce annual income.
• The incredible enjoyment derived from creating great wildlife habitat and being able to have your own private place to hunt and manage for yourself. You are reading this article because you know that hunting on public land sucks and you are trying to decide if buying land is a good use of your money.  It is.

Land is a Safe Investment

The stock market is synonymous with volatility. Its volatile on an annual basis and extremely volatile over a hundred year time span. Compare with farm land values.

Land prices have been reliable and steady since the Depression and did not correct until the 1980s, then started up again. Farm land has increased in value by a factor of 50X over that time period.

AS you can see from this chart, timberland values tend to be less volatile and climb steadily.

These charts show the overall trends in general. However, it is possible to make great land investments and even, in rare cases, end up with property with very little cash input.

Leveraging Land Deals

The great thing about real estate is that it can be leveraged. In other words, you can take ownership based on its value with a small percentage in cash and borrow the rest from a bank. The income produced by timber sales and farming can be used to pay the loan.

In my real estate investment career, “back in the day” I sometimes was able to put some cash down on a tract of land, sell timber for a large percentage of the total purchase price and resell the property. I made my living that way.

Today, with timber prices low and land prices high, this is difficult to do. However, it still makes since to look for land that can produce fast income and finance the deal, using the income from timber and farm rent to make payments on the debt.

The other part of leveraged deals is that when timberland goes up by, say 3%, you are gaining 3 points on the total value, not the cash you put into it. If you have $30,000 in a tract worth $100,000 and it goes up in value 3%, you actually made 10% on your investment.

When buying land, you make your money when you buy it. Know what its worth, know what its commodities are worth (timber, productivity of the farm fields, minerals)  and buy it to make a profit.  If the price doesn’t make sense from an investment standpoint, walk away.

Getting a Return on Your Investment

Start a Hunting Club

If you can purchase a large tract of land, why not start a hunting club? A farmhouse with barn to use as a lodge, some farm fields and some forest has all the ingredients.

I work on some land that 5 guys pooled their resources to buy back in 1980. There is a tract in some of the most beautiful country in Pennsylvania with river frontage, 11 acres of tillable land and 800 acres overall, with state forest beyond. It was a struggle to get the money together for a down payment and get a loan, but now they have a truly one of a kind place to relax, hunt and fish.

Rent Out Farmland

If you buy a tract with a lot of tillable acreage, and you are not a farmer, you could lease the acres out to one. The rate depends on supply and demand and also the productivity of the soil.

This is where some due diligence prior to the purchase can pay off. Find out what the land usually produces.

Sell Existing Assets On the Land

For a while there was a feeding frenzy in Ohio where you could buy land in the morning and sell the mineral rights and get all your money back in the afternoon. That kind of market is extremely rare but it illustrates the point that once you have control over an asset that resides on a tract of land, you have something that can be sold.

If OGM rights are in play in the area you could look into selling them and keeping the surface.

You could also divide the property and sell building lots where it is allowed and keep the rest to hunt on.

You could put a wind or solar farm on it – though not advisable for aesthetics and get subsidies from liberal political programs.

You could sell off pasture or tillable land and keep the mountain ground for hunting.

If you buy land that a Conservancy wants…yer in the chips. I once bought a tract for $500,000 and sold it a year later for a Million.

That was for an investor. If I were doing my own deal, I would have kept it and sold development or management rights only for a break even price.

A hunting club I did a timber sale for years ago recently sold their development rights for a Million.  What? yeah, they got a cool Mil for something they weren’t going to develop anyway, crazy!  One large landowner had a wind turbine company lease locations on their property for a nice profit…although an eyesore and noise pollution.

You can manage the timber and produce income from a depreciable asset that has very attractive tax breaks. Done right, you can get a flush of income in one year, then another in 20 years.

Timber, unlike the above income sources is easy to measure and is an asset you can see before you buy the property. It also grows a little each year.  Timber prices can be volatile, but very high quality timber is always in demand…that’s where professional foresters come in.

Hopefully, prices will go up as it grows, so you make money both ways. It is renewable and continuous when managed properly by a professional Consulting Forester.  Land can produce timber income for your family forever.

Price of Hunting Land Typically Appreciates with Improvements

While timber used to be the thing to look at when investing, today, I believe it is the hunting potential. If you buy a tract of land in a good place to hunt deer and turkeys and make improvements on it to enhance the hunting, that will make the land extremely valuable to someone who has lots of money but doesn’t want to start from scratch with his improvements.

If you have a tract that consistently produces big bucks and has some nice amenities like water, a barn, nice house on it, that land will always be marketable and only increase in value.

Even better if you buy and hold the tract to hunt on for a long time. Let it appreciate  while you enjoy it.

Ways to Increase the Value of Hunting Land

I have often been able to make a profit of 100% on a land transaction by making improvements like a bridge, culverts, good road, cleared building site with a view, well and perc site. Use a light timber sale to pay for the improvements and carrying costs, and you can make a nice profit.

Improving Land for Hunting

The techniques for improving land for hunting are covered in great detail on my youtube channel. There are several articles going into more detail in this blog site as well.  But, I will go into some here:

Most folks think that food plots are all that is needed to increase wildlife sightings.  While valuable, food plots are only one part of a holistic approach to habitat improvement.  The first thing I look at when I visit a consulting client is the forest – what’s growing that is valuable from a habitat perspective and from a timber value perspective.  Quite often there is little value in the forest for wildlife or timber, so I recommend a regeneration project.  We apply selective herbicides to the unwanted vegetation and thin the forest of its low value trees so that the timber will sprout back and new plants will start to come up from the seed bank.  Did you know that you can reduce the quantity of oak trees on a stand of oaks enough to regenerate new trees, forbs and shrubs and increase the amount of acorns produced?  While the loggers are on the property, this a good time to create food plots, doze out good access roads, plant skid trails, put in good access to the public road with culverts, stone, maybe a bridge.

You can strategically place food plots, trails and stand locations to make the land more huntable.

I have had guys call me to come to their property to show them how to increase the numbers and quality of bucks they harvest.  With doing everything laid out in their habitat plan, they were able to attract and sometimes harvest trophy whitetail bucks after years of seeing none or just little scrub bucks.  Once you start shooting trophy wall-hangers, you can show those mounted deer and photos to a buyer who is looking for a place to hunt and charge a premium price for that land.

How Much Money Can Realistically Be Made By Investing in Hunting Land?

AS show in some of the above examples, I have made some great deals for investors who had the money and were tapped in to some wealth. Some deals were great and some others were sour, but I have never lost money on a land investment.

I have been in business with guys who invest in land full time. Some were passive investors and some where big time corporations.

I worked for a guy who was second to Donald Trump in real estate wealth as an individual. He bought over 100,000 acres, filed bankruptcy after borrowing $10,000,000 and got it all paid back with interest out of the timber over time, keeping over 50,000 acres free and clear.

How much can you make? Lets say you bought some land in Tioga or Bradford County back in the 80s.  You sold some black cherry and sugar maple over the years and got most of your investment back, then the gas boom hit and you leased your gas rights for $2,500/acre. We can’t guarantee any of this will happen, or for-see the craziness of the gas boom,  but if you weren’t in the game, you would have missed out.

Investing in Hunting Land For Retirement

If you buy right, you can buy timberland in your good money-making years and grow the timber until you retire. You can use that timber to pass on to your heirs or sell it for cash flow during retirement.

If you purchase property with good growing site conditions and a good mix of valuable hardwoods when the trees are small sawtimber sized (12-16 inch diameters) and manage the timber for 25 or 30 years, you can reap a very nice profit from the investment.  For example, I recently did a timber sale for a farmer who recently retired from dairy farming.  He bought his land for a very low price in his 20s.  Twenty years ago, he did a timber sale on his 50-acre woodlot for $80,000 after owning it for 25 years.  Luckily, he sold it to a very good logger who left plenty to grow.  I was able to get another $50,000 this round and in 20 years, it will be ready again – only this time, I would recommend a regeneration harvest to start the stand anew.  He sold his timber for twice what he paid for his entire farm with barn and home.  Now, I am not saying you could go out and buy a farm with today’s prices and do the same thing, but it illustrates the cash flow possible from long-term ownership of timberland.  Also, with the high-grading practices common today and the disregard for sound management practices, a good stand of small sawtimber is hard to find.  But, not impossible.

The tax advantages of timber income are significant and make timberland investments very attractive to high-income individuals.   A good financial advisor who understands timber tax laws teamed up with a good Consulting Forester can help you with estate planning. Timberland can be a great hedge against inflation and great place to diversify your investment portfolio.

Conclusion

I hope I have made a good case for investing in hunting property. I got off on a tangent a little but hunting quality, while important, is not the only thing to look at when buying land for hunting.

If you are going to buy hunting land, you may as well make a good investment in the process by making sure the land can pay for itself over time and appreciate in value. This type of tract will far outclass the equity markets as an investment vehicle