I am moving from a big cabin near Chillicothe to a small cabin in Hocking County in the Hocking Hills. So I am practicing what I preach, that country living is the way to go. There is at least one negative - last night I almost hit moving deer twice.
The small cabin is on 153 acres. It has a permanent conservation easement on it, so it cannot be developed. Land in this area is appreciating as it is considered an excellent investment as well as a great place to live. There is a major improvement of Rt. 33 under way that includes a bypass of Lancaster.
The selection of this land for investment and recreation often includes major emphasis on access. People who use such land wish to get there fast from wherever they live or wherever they work. So proximity to major routes to major cities is important in both value and appreciation. For example, timberland near I-77 is saleable to Cleveland, Akron and Canton folks, even though it might be over 100 miles from Cleveland.
There are about 500,000 hunting licenses sold every year in Ohio. Many of these folks either own wooded land or are selling wooded land for hunting and other forms of recreation such as 4 wheelers, 4X4, dirt bikes, hiking, camping, birding, wildlife conservation, etc. This interest in southern Ohio timberland ownership is making the investment in timberland hot.
Some timberland owners realize income from occasional selective cutting of the hardwoods. Here in Ohio we have excellent quality in some areas for some species such as cherry, white and red oak, hard maple, red maple, walnut and ash. Well managed timberland can produce a 5% annual return on the timber harvest as well as over 5% appreciation of the value.
Many folks are interested in investing in southern Ohio for both profit and recreation. Some of them have no extra cash to do so, except in their pension plans. If they were to inquire at a bank or an investment bank, they might be told that pension funds cannot be invested in timberland. Not so.
IRA funds can be transferred upon request to a self directed IRA. Now, in order to invest in timberland, the custodian must be agreeable and cooperative. We have a list of such custodians. There is only one in Ohio, at Elyria. The most popular real estate self directed IRA custodian is in Colorado.
Now, timberland is an ideal IRA investment, because the best benefits from timber and timberland require a long term investment. Pension funds work well with long term investments where management hassles are minimized and trading is unnecessary.
You may notice that there is a lot of timberland on the market. Some of these tracts are large. There are a number of corporations that own large tracts of timber. These include coal companies, utilities, and paper companies. Many of these companies have decided to sell timberland and invest their funds elsewhere. So there is an active market now.