Integrating Forestry and Real Estate

Being a Registered Forester and a Land Broker this topic is near and dear to me. I get a lot of questions, so I thought this to be a great topic to post on my blog! I recently had a chance to list a REO (Real Estate Owned) property. I did a site visit and boy was I surprised. Let me described the property… The property is 73 acres in size with paved road frontage on a county road. The property has no internal road system for access or showing. The entire tract was planted pines approximately 15 years old.

Any suggestions?  Folks, there is some low hanging fruit here! I decided to have the timber thinned, this will accomplish several goals:

·      Create some immediate cash flow. We  harvested about 2,975 tons of pulpwood and generated about $22,915 of revenue.

·      Logging contractor constructed a road making the property easier to access

·      Thinning the timber will improve the aesthetics

·      Chose contractor based on his ability to chip the wood. The contractor owns a fuel wood chipping unit. This will allow us to chip the small trees and the left over tops improving the aesthetics.

There are two scenarios you should be aware of when considering this option: 1) many properties have been ruined by having the timber harvested or thinned. Tree selection is paramount, meaning the selection process should not be done by the harvesting contractor. Choose a ‘registered forester’ or ‘consulting forester’ to represent you and ask for referrals.  2) Selling the timber and land separately generally does not increase your sales revenue, in fact you can decrease the value of the property by harvesting the timber!

If you are keeping the property for decades or generations,  manage it like a timber company, plant, thin and clear-cut and do it over and over. If not be careful. I have had 5 properties that were clear-cut and I was only able to sell one! Keep in mind the buyer will have to spend $150-$250 per acre to put the property back into tree production to start their 25 year investment. They have to buy the property cheap, cheap!! If you are planning to sell your property…..don’t clearcut the timber!!

For information on buying or selling land, contact G. Kent Morris, ALC, RF            (706) 457-0090