The Value of Timberland
Understanding how Florida timberland for sale is valued is necessary in order to make the right timberland investment. The value of timberland can be broken down into three categories, the value of the timber growing on the property, the bare value of the land on which the timber sits, and the land’s higher and better use value.
The value of timber can heavily influence the value of timberland, and should be taken strongly into consideration when looking at investment opportunities.. Timber values depend on a number of factors including: (1) local market conditions, (2) timber species, sizes, quality, and quantity (3) harvesting techniques and amount of timber sold in a given transaction, (4) conditions of the timberland property in terms of harvesting, and (5) state and local harvesting and management practices.
Bare Land Value
Bare land value (BLV), sometimes referred to as soil expectation value (SEV) or land expectation value (LEV), is a technique that is used to measure the net present value (NPV) of bare timberland for sale in Florida and other timberland properties, or more simply put the value of the “dirt.” It is commonly used for tax purposes, but can also help potential investors identify the optimal rotation length for a timberland property, plan and organize timberland management activities, determine which specific silvicultural activities to participate in, as well as conduct marginal analysis on harvesting decisions related to short-term changes in local markets.
Hire and Better Use Value
As an area becomes more developed, the economic value of timberland increases over and above its timber value and bare land value. This is due to its potential to be subdivided into parcels and sold separately at higher per acre values. Housing demand has a significant influence on the HBU value of timberland, and HBU values are expected to increase in the long-term with increasing population.
Hire a Land Professional
Because there are many complex factors involved in determining the true value of timberland, investors who are interested in investing in Florida timberland for sale are highly encouraged to seek the assistance of a real estate land professional who specializes in Florida timberland. A land professional with timberland expertise will help you determine the value of the land you are considering, and ensure you make a wise investment.