If you are looking for a great piece of investment land to expand your portfolio, the timber industry may be right for you. Investing in timberland allows for increasing returns on investment while also giving your family the freedom to utilize your property for other recreational activities. In this comprehensive summary, SVN | Saunders Ralston Dantzler aims to educate investors on the ins and outs of the timber industry and how investors can become involved.
What Are Your Harvesting Goals?
There are a variety of reasons to get involved within the timber industry. Whether you are looking for a safe, long-term investment, are focused on wildlife management, or are interested in improving your land’s aesthetic, managing and harvesting timber serves many benefits. Once the investor identifies their financial and operational goals, they can begin to coordinate a harvesting plan.
Should You Hire a Broker?
After establishing their investment goals, investors should speak with a timber appraiser who will assist in coordinating those goals. This broker is critical to the transaction process as they can determine the crop’s value and custom-fit a specific harvesting strategy. They are experts in their field and will support clients throughout the entire process of valuation, proposed transactions, and harvesting strategies.
Selling Timber Effectively
When Is The Right Time to Sell?
The sale of timber always comes down to the needs of the property owner. Most landowners continually manage and develop their timber as its value appreciates and raises future profits. In contrast, sometimes landowners need liquid cash and would need to identify a more feasible approach. There are also other cases in which waiting too long could mean that you miss out on the ideal window to harvest.
Ideally, landowners begin to harvest when the market is healthy and they have produced a high volume of timber. Some landowners practice selective cuts rather than a complete harvest. This can provide the landowner with the best of both worlds of steadily generating sale revenue while also incrementally producing valuable assets for future sales.
How is Timber Valued?
The value of timber depends on the volume of your harvest, the type of tree, and the age of your crop. The specific time of harvest should depend on these three elements:
- Volume. How much timber is located on your property and how big are the trees? Larger acreage properties with more sizable trees are typically more profitable.
- Type. Different types of trees yield differently valued wood. For example, hardwood trees (oak, sycamore, eucalyptus) are considered more durable than most softwoods (pine, cedar, spruce). Although the value of hardwoods is typically greater, softwood trees are more common as they take less time to cultivate.
- Maturity. How old are your trees? Generally, there is a direct relationship between the age of the tree and its size. Harvest value can greatly vary depending on its maturity level.
How Far Are You From the Buyer?
It’s always important to consider your distance from the sawmill that will be purchasing your timber. The resources and expenses needed to transport the timber can greatly impact the overall return you make in the sale.
Consult With Land Experts
At SVN | Saunders Ralston Dantzler, our land professionals understand the potential value that timber land can provide investors. Whether you want to get involved in the timber industry or are just looking for a safe investment that yields high returns, our forestry team is ready to guide you through the transaction process. They are experts in constructing efficient timber harvesting strategies that are custom-fit to each individual client.
Of course, if you own land with valuable timber and are looking to sell, our land professionals are well established with a global presence to locate the perfect buyer for your asset.
Click below to learn more about the fascinating process of harvesting timber.
For more land and commercial real estate content, subscribe to our YouTube channel at YouTube.com/@saundersralstondantzler.