Forestry Investment Calculator

Core Inputs

Stand Name

The name of the property or forest stand you are analyzing. Used for your reference and organization only.

Acres

Number of acres in the area being analyzed. Hectares may be used — just keep units consistent throughout.

Discount Rate

The rate of return you would receive from an alternative investment of comparable risk — treated as an opportunity cost. Because of the unique properties of forest land, it is recommended to use a rate no greater than 1% above your selected inflation rate or the 10-year TIPS rate. A higher discount rate will demand higher performance from your woodlands and may not accurately reflect opportunity costs.

Inflation Rate

Expected average inflation over the rotation period. Used to project future nominal values of income, expenses, and real estate appreciation. A baseline of 2% is recommended; higher estimates range from 3.5–4%. In effect, the chosen inflation rate is added to the Internal Rate of Return.

Property Tax ($/acre/yr)

Your total annual tax bill divided by the number of acres.

Lease / Rent Revenue ($/acre/yr)

Revenues from hunting leases, recreational leases, or rental properties, divided by acres.

Other Yearly Revenue ($/acre/yr)

Any other consistent annual revenues — maple syrup sales, small firewood operations, etc.

Land Purchase Costs

Financed Land

Leave Per Acre Land Cost blank. Enter the estimated current land value in Land Value Override, your monthly payment per acre, and years until payoff.

Purchased Outright

Enter the per-acre purchase cost and leave the financing fields blank.

Financed With Down Payment

Enter the per-acre down payment in Per Acre Land Cost. Enter monthly payment and years until payoff normally. For Land Value Override, take the estimated value and subtract the per-acre down payment.

Inherited / Family Land

Method 1: Leave all land cost fields blank — real estate will not factor into the analysis.
Method 2: Enter the current per-acre market value in Per Acre Land Cost to capture the opportunity cost of capital locked in the real estate.

Lump Sum Revenues & Expenses

Revenues

For inconsistent income events (timber harvests, easement payments, etc.), name each activity, enter the net revenue, and the year it occurs — using year 0 as a baseline, not calendar years. Do not exceed the rotation age.

Expenses

Same approach for one-time costs (site prep, pre-commercial thinning, road work). Use net figures where possible — if an expense is tied to a revenue, deduct it from that revenue rather than entering it separately.

Outputs

NPV / Acre

Discounted revenues minus discounted expenses per acre. The core measure of investment value — what all future cash flows are worth in today's dollars at your chosen discount rate.

IRR (Est.)

The discount rate at which NPV equals zero — effectively the annual rate of return on your investment. On the sensitivity chart, IRR is the point where the NPV curve crosses zero. Because this is an iterative calculation, it is shown as an estimate.

Discounted Revenue / Acre

Present value of all future revenues, discounted at your chosen rate.

Discounted Expense / Acre

Present value of all future expenses, discounted at your chosen rate.

Nominal Profit / Acre

Undiscounted per-acre profit or loss — the raw sum of all inflation-adjusted revenues minus expenses without time-value adjustment.

Total Nominal Profit

Nominal profit multiplied by total acres.

Anticipated Land Sale Revenue

Projected sale price of the land at the end of the rotation, based on purchase cost inflated at your chosen inflation rate. The model assumes the land is sold at rotation end.