What works:

Sealers and Wood Preservatives
Clear water repellents, often sold as "water sealers", allow the wood to age naturally, and at the same time provide a measure of protection by partially sealing the pores of the wood.  Some brands have UV blockers to further protect the wood.  After the initial coat, a yearly reapplication is best.  Many home centers now offer these products in quarts, and some products are available in spray cans.

Semi-transparent deck stains
These stains perform better than water sealers primarily because of the added pigments that protect wood from weathering caused by UV rays.  Many of these stains are now water based which can actually outperform oil based stains.  Be careful with pigmented stains, however, as getting the nestbox too dark will cause it to overheat.

Similar to deck stains, oil-based stains are available in natural (no pigments) and in a variety of colors (never stain a nestbox a dark color). A reapplication is required on a yearly basis to provide the best protection.  Some brands contain UV blockers, which further protect the wood from sunlight, especially important on natural or light colored stains.  One advantage is they are available in small quantities.

Linseed oil
Linseed oil is pressed from dried flax seed, basically making it a vegetable oil.  Because raw linseed oil contains no volatile driers, curing time is lengthy - weeks in humid conditions.  Although linseed oil does a fair job of blocking moisture, it offers no protection against UV rays.  It also encourages the growth of mold colonies, earning it the nickname "mold fertilizer."  Despite these drawbacks, raw linseed oil is a common nestbox finish.

"Boiled" linseed oil available today is not actually boiled.  Petroleum based solvents and metallic driers are added to raw linseed oil for a faster cure time.

Exterior latex paints
Of all the finishes available, ordinary latex-based house paint provides the best protection, and is available in a wide range of colors (always use a light color when painting or staining a nestbox).

The downside is that paint used full strength completely obscures the wood's natural grain.  One way around this is to soak the nestbox panels in a diluted solution of latex paint and water.  The paint will soak into all parts of the wood, and most importantly into the end grain.  The resulting finish will allow at least some of the wood grain to show through, and at the same time provide excellent protection against moisture and UV rays.

Roof Coatings
Originally formulated for water-proofing and to extend the life of roofing materials, these products provide excellent protection for the nestbox roof.  Some products (Shingle Saver is one brand) are available in a clear acrylic.  Other brands (Conklin for example) are available in white or light tan.  These might not be available in all regions and are usually sold in large quantities, making them an expensive option for one or a few nestboxes.

What doesn't work:

Film-forming finishes
Clear film finishes such as lacquer, shellac, urethane, and varnish should not be used on a nestbox.  Both sunlight and moisture will penetrate the film, causing it to crack, blister and peel.  These are strictly indoor finishes, seldom lasting more than a season outdoors.  Avoid them.

Painting the inside of a nestbox

Fifty or sixty years ago, many paints contained a toxic brew of volatile and metallic driers, including lead.  Thankfully, lead-based paints are gone, but the stigma surrounding the dangers of painting the nestbox interior still remains.

Whether it's now safe to paint the inside of a nestbox is not fully known; however, the paints and finishes available at the retail level today are considered non toxic when fully cured.  The key words, when fully cured, bear repeating.

If you want to paint the inside of a nestbox, our advice would be to use a water, acrylic, or latex-based finish or paint, and do this at season's end, when you can let the paint cure over the winter months.  Keep in mind before doing this, however, that a well constructed nestbox, with adequate roof overhangs and tight joints, really doesn't need interior paint.

This concludes our Building a Nestbox tutorial series
Although painting a nestbox is optional, there are several reasons you might choose to do so.  Painting a nestbox a light color will reflect more sunlight, which will reduce interior heat buildup.  A nestbox made of bright wood can be stained to help it blend in with its surroundings.  But the main reason is that a painted or stained nestbox simply lasts longer.

And you don't have to paint the entire nestbox.  Because the roof takes the brunt of the elements it's usually the first panel to deteriorate.  Applying a finish to just the roof will extend its lifespan considerably.
Building a nestbox tutorials

Nestbox materials
Entrance holes
Adhesives and caulk
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This site was last updated on 01/01/2016
Finished with linseed oil, mold turned this nestbox very dark in a single season.