National Forest Land Investments

Want to make money while helping to consolidate state and national lands? There can be politics involved, but there can also be big profits.

Where I lived in Northern Michigan, real estate deals between developers and the state or national forests were not uncommon. Direct sales are uncommon, because neither the National Forest Service nor the State Departments of Natural Resources have much in their budgets for buying more land. What they can do, however, is trade land.

Why do they do this? To consolidate wild lands. If you have ever looked at a plat map for an area that has national or state forests, you may have noticed that the forests consist of a patchwork of properties. There is private land mixed with public. There may even be little pieces of state or national forest land that are miles away from the rest of the forest.

Forest Land Investment - An Example

Suppose you have land in the middle of a large area of state forest. The state would like to have it, in order to make the state forest more complete. They don't have the money to pay you, but they do have isolated pieces of land closer to a nearby town, and they may be willing to trade one of these for your land. You negotiate an exchange.

The state gets what it wants, and you get what you want. What you want, as an investor, is land that has more value. You may have paid $60,000 for the property in the state forest, and traded it for a piece that can be sold for $100,000.

This process is common when ski resorts are built in the west. It is nearly impossible to buy national forest land, or to sell land to the Forest Service. However, trading pieces of land is how both the resorts and the Forest Service sometimes consolidate land for their purposes.

This can be a difficult way to make money starting from scratch. You don't want to just start buying land hoping that you can trade it for more valuable land. If you have land that adjoins public land, however, this is a strategy to keep in mind.

Another possibility is to find private land in a National or State Forest, and then tie it up with an option. Then you can negotiate with the Forest Service to see if they might make a trade. Before you do even this, however, talk to a couple insiders to see if they are doing any trading in your area.