Published date:October 25, 2019
Last updated date:October 25, 2019
By Manny Manriquez
by Brandon Swartzlander
Midwest Farm & Land Co.
When you’re selling land, any advantage that you have is a good one—especially if that advantage can mean increased profit for your buyer. Such is the case with marketable timber, which, depending on the supply and demand specifics of where your land is located, could be a major boon for the right buyer.
Not all land with trees is timberland, and not all timberland is inherently profitable. To sell land with timber on it—and to highlight that timber as a benefit for potential buyers—you need to know a thing or two about marketable timber. Below, we’ll go over some of the specifics so that you can maximize your timberland listing and add more value to your sale.
How Much is Timber Worth?
Like most things in life, the marketability of timber depends on whether or not there’s a buyer for it. Unfortunately, many sellers improperly estimate the value of their timber and miss its potential as a profit maker and selling point.
There are three key factors that affect the value of timberland:
1. Supply and demand in your area.
2. The market value of timber in your area.
3. How much timber you have.
So how can you tell if you’re sitting on a pretty penny’s worth of timber? The best possible conditions in terms of timberland profitability are low supply and high demand, high market value, and having plenty of timber to sell. And while meeting all three of these factors isn’t a requirement, the more you can highlight the prospective profit for interested buyers, the higher the sale price you can ask for.
Tips for Selling Timberland
Timberland, like agricultural land, recreational land, and other specific property designations, has its own set of rules when it comes to making a quick and profitable sale. Follow the four tips below for a leg up.
1. Get a professional assessment. Don’t just guess when it comes to estimating the profit potential of the timber on your land. Instead, bring in a professional forester, who can take inventory of your available timber and give you an idea of what it’s worth in the current market. While there is a fee for the assessment, it’s worth it for the authority that it lends your claims.
2. Know what kind of timber you’re working with. Not all timber is created—or valued—equally. Timber for building, for example, is going to garner higher profits than timber for fireplaces. The type of timber on your land, as well as its quality and quantity, should be clearly elucidated in your listing.
3. Consider other variables. Trees alone aren’t usually enough for someone interested in harvesting timber. To get the job done, there are other necessities too, including access roads, the distance of the nearest mill, and the condition of the soil. The more these variables are in your favor, the more you can hype up your land’s profitability to an investor.
4. Sweeten the deal for the buyer. In some cases, a particular tract of land may have value to a timber buyer but not necessarily the whole piece. There are instances, for example, where a new land buyer may want to improve the land while creating a more productive habitat for wildlife, selling off some timber and cultivating the rest of the property. And in many cases, a buyer can use the money gained by selling that timber as a down payment when purchasing. Those contracts can be completed at the time of closing to ensure less out of pocket dollars—and a more favorable contract—for a buyer.
Inevitably there are many factors for buyers and sellers to consider when buying or selling a piece with marketable timber, so work with a qualified agent who has experience in the area. And because there’s high competition for profitable timberland, aim for multiple offers instead of just taking the first one that comes along so that you can get the absolute best price possible.
All Land News