John's Journal... Entry 267, Day 4
What to Look for When You Buy Hunting Lands
Editor’s Note: More and more sportsmen are buying land not only to use as wildlife retreats and to make sure they have a hunting and fishing place for the future, but they're also buying timberlands from as an investment. Here's a look at why.
George Mayfield owns The Roost Hunting Lodge in Aliceville, Alabama, where he manages 13,500 acres. A visionary, Mayfield looks at raw land with a creative eye to determine its maximum yield if he manipulates the habitat and considers other components besides timber production. Mayfield, a true artist in every sense of the word, uses the forestlands as his canvas and front-end loaders, chain saws, tractors and other equipment as his brushes. His paints consist of seeds, fertilizer, water, electricity and wildlife. "The difference in what I do and what others do with forest lands is like the difference between painting a house and creating a work of art," Mayfield says.
"When I consider purchasing a piece of land, I first determine whether the government will assist me with the land. All the lands I've bought in the past have had portions that qualified for Conservation Reserve Program (CRP)." Mayfield once purchased 700 acres, 480 of which qualified for CRP payments of $54 an acre every year for 10 years. The land cost $750 an acre. Over a 10-year period, Mayfield received over half the purchase price for all the land from the CRP for the 480 acres. "The CRP program provides moneys to improve habitat for wildlife," Mayfield reports. "For instance, if you only look at the land for timber production, you may want to plant 622 trees per acre. However, if you plan to use the land for timber and wildlife, you need to plant 500 trees or fewer per acre to create openings for your wildlife. Because I operate a hunting lodge, I can utilize the wildlife, make up for the monies we've lost with the lower tree-stocking rate and get higher CRP considerations."
Mayfield considers a property's agricultural value. "I buy a lot
of land in Alabama's Black Belt, which has good farming soils. Therefore
I want to know before I buy if any of the land farms well. Then I can
rent the land to a farmer to generate additional no-risk revenue."
Timber Potential and Water Prospects:
"Since timber provides long-term revenue instead of quick revenue
like CRP and farming, I always determine a land's timber potential,"
Mayfield explains. When Mayfield thinks about purchasing property, he
obtains a soil map to learn its timber prospects. "Pine and hardwood
create considerably different cash flows. Pines can produce an income
within 20 to 25 years, whereas hardwoods take 60 years to produce revenue."
You can plant some hardwood species that will provide mast crops for wildlife
and receive some benefit before the 60-year rotation ends. When Mayfield
looks at lands conducive to growing hardwoods, he considers the benefits
for wildlife habitat as well as timber potential. Next, Mayfield looks
at whether the land has the possibility of putting in a pond or lake.
Most landowners like some type of water on their property because it improves
the land's aesthetic value. If Mayfield wants to purchase a piece of property
without water, he makes sure the tract can hold ponds or lakes. Once Mayfield
calculates the cost of building the pond per acre, he estimates the increased
value the pond will add to the land. "If I can build a pond for $1,000
an acre or less, then I definitely will build one," Mayfield says.
"If a pond will cost more than $1,000 an acre to build, then I'll
decide just how much I really need water on that property."
When evaluating a tract, many forest-land purchasers forget to find out
what type of forest-land management systems their neighbors use. "If
you want to host hunters, you have to consider the hunting practices of
your neighbors," George Mayfield emphasizes. "If they hunt intensively
or not at all, then that dictates whether you can develop animals and
determines the quality and the age of the animals on your property."
Since Mayfield operates a hunting lodge on the lands he owns, he also
considers how much wildlife the land holds, whether or not he can manipulate
the habitat to yield more and higher-quality wildlife, if he can produce
an area where hunters can harvest the wildlife and how he can make that
wildlife a renewable resource for many years. "Since we know the
value of wildlife, we determine the worth of the major wildlife species
on our property," Mayfield explains. Mayfield easily determines these
numbers by dividing the price hunters pay to hunt his land by the number
of each species taken off his land. If you hunt the wildlife, entertain
business clients or build family hunting memories, the value may be higher.
"For instance, a 3 1/2-year-old buck has a commercial value of $3500
to $5500; a 2-year-old turkey gobbler -- $1500; a duck about $50 each;
and a dove about $15 to $20 each. By intensively managing wildlife, we
can create steady, renewable revenue. While pine trees and hardwoods grow,
we still have a good cash flow from wildlife production."
TOMORROW: CONSIDER RESALE PRICE