Tips & Insights

Maximizing Your Return

Want to earn additional income from your property while simultaneously raising its value? Then manage it for timber and wildlife. Some say it can’t be done, but Mark Thomas is doing it. So can you.

Most property owners seek to maximize timber value or wildlife numbers. But not both. “Wildlife biologists don’t know what foresters do,” Alabama’s Mark Thomas explains. “They just know that generally they dislike foresters. And foresters don’t know what the wildlife biologists do but think that wildlife biologists want a bunch of snails, snakes, and endangered animals on a property.

“When I talk to a landowner, I try to determine what the landowner wants and then prioritize his preferences. Based on his objectives, I put a plan together that integrates sound forestry practices that will produce maximum yield on the timber in a short time and good wildlife practices that will increase the size and the number of animals on the property as well as their value. Most of the plans I set up have a three- to five-year horizon.”

SIMULTANEOUS MANAGEMENT

Thomas’s philosophy of forest and wildlife management considers timber and wildlife simultaneously rather than separately. According to Thomas, “If you manage strictly for timber production, you’ll diminish the wildlife potential of the property. If you manage only for wildlife, you’ll diminish the timber production of the property. However, if you manage for both simultaneously, you can increase both resources at the same time.”

On the wildlife side, Thomas manages properties for deer, turkey, quail, small game, and non-game species, depending on the landowner’s requests. He generally budgets the timber on a 24-year rotation that includes four cash flows during that period. Thomas calls his management system Monetization of Natural Resources.

“When I talk with someone about forest management, I suggest he compartmentalize his land into small sections of 35 to 50 acres maximum,” he says. “Next, look at how many cash flows you want from the land and during what period of time you need them, and then we’ll determine how many cash flows you can get during that 24-year period.”

To reach these goals, Thomas looks at different types of forest management techniques, including shelter wood, seed tree, timber stand improvement, clear cutting, hardwood management, mixed stand management, and conifer management. He determines the proximity of sawmills or fiber mills and the types of raw materials these mills are purchasing. Then he studies which products are producing premium prices and decides what kinds of trees a landowner needs to plant and what types of product he needs to grow.

In the past, traditional practices dictated hardwood rotations of 70 to 80 years. But better forestry practices have not only decreased this time frame but increased profits from forestlands. Nowadays, during year 11 or 12 in a 24-year rotation, you’ll harvest the land’s pulpwood. Peelers, poles, chip and saw get harvested in year 16 or 17. Prior to the final harvest in year 24, you can take off a few large poles and small-diameter saw timber. Then at the final harvest, the property will have only saw logs, which at 6,000 to 9,000 saw logs per acre will make up the landowner’s final big-money harvest.

Thomas notes that the South in particular has become “the breadbasket of the world with respect to timber management and timber productivity. In the past, Southern timberland produced about ½-cord of wood per acre per year, but today landowners are growing about 4.7 cords of wood per acre per year, which represents a nine-fold increase.”

THE VALUE OF WILDLIFE

When foresters managed timber under an 80-year rotation, deer hunters paid approximately $1 to $2 per acre to lease land. That’s assuming that the property owner can get someone to lease his land. Thanks to better forest and wildlife practices, hunting lands now lease for $8 to $10 an acre and up to $37 to $50 in some markets.

“In some situations, landowners can greatly increase lease prices,” Thomas says. “I have one client with seven properties who leases them for $50,000 a piece with total revenues of $350,000 per year. And he does no management on these properties. Hunting and wildlife-associated industries are a $101 billion industry nationwide.”

Now property owners can put a financial component to the wildlife on forest lands to help determine the value of those lands. If you own 200 acres of property, consider managing it intensively for timber production to receive four revenue streams from that timber in 24 years. At the same time, if you also manage the property’s wildlife and lease the hunting rights at $25 per acre, you’ll receive an additional $5,000 per year every year during those 24 years. If you just want to develop the wildlife for your family and friends, you’ll actually receive about a $5,000 additional benefit from that property every year. Over that 24-year period, you’ll have had the benefit of $120,000 from wildlife on that 200 acres, a revenue stream that adds a considerable amount to a property’s value.

ACTUAL EXAMPLE

Thomas cites the purchase of a 100-acre property four years ago. It sold for $450 an acre ($45,000) and had no history of wildlife management. Thomas developed wildlife and timber management programs, and now the property is generating a $96,000 revenue stream from timber. The value of the property has grown to $2,700 per acre. Also, the price of hunting leases continues to increase in value year after year.

“The demand for recreational properties in close proximity to metropolitan areas is steadily increasing,” Thomas explains. “As metropolitan areas expand, so should the demand for recreational forest lands.”

Cooperation – A Key to Better Wildlife

To increase the wildlife potential of his personal property, Mark Thomas realized he needed more land. He met with neighboring property owners and formed a Quality Deer Management Cooperative Program totaling almost 5,000 acres with the assistance of the Quality Deer Management Association (www.qdma.com). The landowners and hunting clubs surrounding Thomas’s property agreed to allow the 1½- to 4½-year-old bucks go unharvested. At the same time, they agreed to cull high numbers of does and unantlered bucks. This program has improved the quality of bucks and the wildlife value on all the lands involved.

“We also have started controlling the predators, particularly the high coyote population on these cooperative lands,” Thomas reports. “These practices have increased the number of turkeys on all the land during the four years I’ve owned my property in this area.”

“You won’t find much $450 per acre land any more because most of that land is selling for $2,000 per acre,” Mark Thomas says. “However, with good forest practices, you should be able to recoup about half your money in a few years. Too, by putting in good roads, stalking trails, food plots, stands and shooting houses, you can greatly increase the value of that property. Also, a well-planned timber-rotation program instituted on the land will increase the property’s value as the demand for this type of land continues to grow

Mark Thomas is a forester certified by the Society of American Foresters and a wildlife biologist certified by the Wildlife Society. This dual certification requires degrees in forestry and wildlife management as well as vast work experience in each field. “I wanted to see how the whole puzzle of wildlife and forestry came together,” he says. Thomas’s education and work experience make him one of those rare individuals who know how to produce income from both timber and wildlife.