LAND!!

[Caustic Burno]

By counting ONLY the lease value as the "return" on investment you are not taking into account the increase in the VALUE of the land.

The lease is the only realized gain on the property until it is sold. Real estate is NOT a sure thing either. many have lost their butts and many more will on land. Just cause things are good and have been doesn't mean they always will be. The idea of this post is how to make land cash flow better. Alternative enterprises instead of conventional non penciling in the box ideas. Land is an investment. I like solid returns on my investments. Many economists are screaming real estate bubble right now. That means land appreciation has exceded real value. If you look at all the tell tale signs they definetly point to something changing in the not to distant future. If that happens your appreciation is turned to depreciation.

A lot of people in this area are planting hybred pines, I just don't see that as a good investment, you do get your ag exeption. Take 20-30 years to get a return on the timber.

 

[Beef11]

If you are going into Ag most people have the idea of making money off of land. They also justify it by saying that it will appreciate, it might. The problem is you don't realize the gain of appreciation until you sell the land. The idea with farmers and ranchers is to make the land profitable without the appreciation.

As far as planting timber it is definetly a long term investment with no cash flow for decades. I looked into christmas trees and they are 6-10 years depending on the variety. I think that hybrid poplars for paper would be a better choice. Half the time and cattle can graze underneath so you get double productivity out of the land.