Timberland Valuation 101
Technology has spoiled us. We’ve grown accustomed to ascertaining with a few clicks of a mouse the value of a car, house, or most any other items that we own or wish to purchase. When it comes to timberland valuation, this is not an option. A complex mix of tangible and intangible features make up its value, meaning it should be assessed by a professional with the proper training and relevant experience. Properties that to the novice may seem nearly identical can have vastly differing values.
Components of Value
Location. Proximity to public utilities, population centers, recreational attractions, and conveniences add value.
Future uses. Property in the path of progress is worth more based on its potential future value.
Size. Generally speaking, large tracts sell for less per acre than small tracts.
Local land-use laws. Zoning and other rules can impact value.
Current timber value. On rural tracts, the timber may be worth much more than the bare land. Species, size, volume, age, health, access, harvest costs, and local markets affect timber value.
Future timber value. Just because trees aren’t ready for harvest, it does not mean they do not have value. Well-managed, healthy trees gain value as they grow, through volume additions and, as size increases, graduation into new, higher-value product classes.
Wildlife habitat quality. Hunting is a popular recreational activity. Good habitat improves value.
Soils. All soils are not created equal—fertility affects the tree growth rate and the volume per acre of forest products it is possible to produce.
Inclement weather harvest potential. Some soils hold up better in damp logging conditions, allowing for harvesting in the winter months when mill inventories are low. With proper marketing, timber on these tracts brings significantly more than those suited only for dry weather harvests.
Lease potential. Attractive tracts demand higher lease rates.
Terrain. The lay of the land can hinder or limit harvest and management practices. Steep or eroded terrain affects the number of usable acres.
Water features. Buyers often seek ponds, lakes, duck impoundments, and streams.
Aesthetics. Scenic beauty is hard to put a dollar figure on, but often is what makes a property sell.
Neighbors. A property surrounded by noise, unpleasant smells, and trespassers will be less attractive and valuable than one that is not.
Accessibility. Decent access is essential for a working timberland property. Access costs factor into the value a buyer can pay for standing timber.
Boundaries. Survey work can get expensive, so having both a plat of your property and the boundaries marked on the ground is a significant positive.
Improvements. Structures, wells, septic tanks, and bridges in good condition add value.
Defects. Garbage filled gulleys, dilapidated buildings, and other imperfections reduce value.
I can help you identify your land’s positives and negatives and give you tips for enhancing its overall health, value, and attractiveness. If you are buying land, I can help you avoid the pitfalls of the timberland buying process, often at no cost to you since the seller’s agent’s commission is typically split with the buyer’s agent.