Saturday, January 5, 2013

What Questions Should I Ask My Realtor When Buying Timberland?



When buying a recreational property, a good deal of the value could be in the standing timber. As a buyer you need to understand what you are buying such as type of timber (products), how much timber and value of the timber. If you are working with an agent, hopefully that agent can add value to your decision making process. With that in mind, here are several questions that recreational buyers should ask when they are learning about the timber on a recreational property:
Question: Does my agent understand timberland and the markets for timber?
Answer: If your agent doesn’t have experience understanding and explaining timber values, the agent should bring someone in to help who has that knowledge. Make sure your decision is based on accurate information. Otherwise, you may not pay an appropriate price. Make sure the valuation of the timber on a property is directly related to your property of interest. No two tracts are identical. 


Question: How can I have confidence in what I am buying from a timber perspective?
Answer: If the timber component of the property is a major reason for your purchase, it’s a good idea to be comfortable with the timber inventory on the property. Confidence comes from having a complete forest inventory, which will give estimates of acres in each timber stand, such as a 10-year-old pine plantation, 28-year-old pine plantation, streamside management zones, non-forested areas such as ponds, etc. The information should provide volumes by product classification such as pulpwood, sawtimber etc. Sometimes only a forest inventory or “timber cruise” is available and that is OK. Besides you will need these volumes and prices when doing cost allocation on the property. I wrote about this topic in an earlier blog… 




Question: How do I get a handle on how I might want to manage the property from a timber perspective?
Answer: To begin with you as the landowner must determine your objectives. Are you most interested in wildlife habitat, aesthetics or timber production.  A knowledgeable agent should be familiar with forest management practices and can get you in touch with a forestry management professional, such as an Association of Consulting Foresters (ACF) forester or a Registered Forester. To begin with you as the landowner must determine your objectives.  Based on your answers a forest management practitioner can help you outline a plan. Bare in mind, all these uses work very well together. For instance if you are interested in wildlife habitat, you might leave very large streamside management zones when planning a timber harvest.

Question: How can I figure out if I can expect to get cash flow from timber on a property?
Answer: It’s important to have quantifiable, realistic information and goals in regards to potential timber cash flows. This ties into setting your overall goals for the property. Planted pines are easy to cash flow. Your forester knows when each stand needs to be thinned and can determine approximate revenues.

For Information on Buying or Selling Land contact G. Kent Morris, ALC, RF at                          (706) 457-0090   

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