Our goal at Canebrake Realty is to help our clients find, buy, sell, and evaluate land and property in Alabama and Mississippi. We have people come to us all the time looking to buy land for all sorts of reasons. They want their own place big enough so they can hunt all they want. Others want to build a cabin and get away, while others want property to build a forever home. And yet still more folks are looking for more land for farming. We help a lot of clients who need to invest in land as a tax shelter, the timber business, or even retirement savings. In other words: we help people find the right piece of property that suits their needs, budget, and wants.
You’d think it’d be easy – land is everywhere on the planet that isn’t covered by water. The reason we’re in business is because not all land has been created equally. Some are simply more valuable than others because of what’s on it, what runs through it, what the land butts up to, etc. There are tons more variables that go into land valuation so choosing the right place, in the right place can be tricky. We pride ourselves on making it easier for our clients.
Today we’re going to some of the specifics where we specialize: buying and selling timberland. Timberland is special because it has more inherent value than the dirt on the parcel. It’s not mineral rights, it’s not lakefront or oceanfront property, it’s a spot on a map with a value that can vary (obviously) because of the trees growing on it. Is it full of hardwoods? Pines? Sweet gums? Can you harvest the timber easily or will it take a lot of expense to even get started? What types of hardwoods are there? How old are the pines? How valuable is the timber on the property, and how much would it cost to harvest it? How dense is the forest areas compared to the open areas? How many acres of what types of trees are there on the entire property? When’s the last time it was clear cut? Heck, was it ever clear cut and what was the value on the timber then?
Sorry to play 20 Questions but we’re actually just getting started. These are just some of the questions we ask ourselves, and each other, when evaluating the value of land for sale with timber on it. If the piece of property for sale is in Mississippi, we review other recent sales and current listings for value as well. Those comparables (comps) can vary between states because the prices and values could be different in Alabama for the piece in MS. That’s because the market for the wood harvested can differ depending on location. It can even vary in differing parts of the state so knowing the current market for the land, and what’s growing on it, is vital to evaluating property.
The reason we’re harping on evaluation so much is a lot of people simply want to “buy some land” – we listed the possible reasons and there are hundreds more. Don’t just buy some land because of acreage or location, buy land for its full value and potential value. Harvesting land today can pay dividends today, and in future generations when it’s replanted and nurtured and maintained. Consider the total value, as well as possible expenses. Are there enough roads already? Is there easy access? Is there a mill nearby and what’s the going rate for lumber at that mill?
Again, more questions to evaluate when buying. We can talk all day about timberland for sale and what all goes into it.
So what about selling land? Suppose you’ve got land you need to sell and you’re looking for the max sale amount? We ask a lot of the same questions because we want clients to understand their land is a finite commodity. The land that isn’t under water is all the land there is, so it’s highly valuable. You have to get the best evaluation possible for the land and all the timber on it, so you can list it and get the max value.
But even if you know the full value, the total all-in value, you’re still at the mercy of the market. Some land in Mississippi that is very similar to land in Alabama can be priced completely different. Selling your land at the right time, at the right price, is a complicated process and we take pride in helping our clients navigate it as easily and smoothly – and profitably – as possible. Ultimately land is like everything else – its max value is what someone is willing to pay. So finding that special value for sellers is what separates us, we want you to make as much money as possible on your listing for sale. That’s not a selfish desire, it’s an honest one.
The most important aspect to selling your land and the timber on it is getting the value and price right. The second most important consideration is finding a buyer! You can have the best piece of property, fantastic hardwood to pine ratios, great rates in the lumber industry, comps that are spot on, a seller’s market, and every other possible helpful features to your property but if nobody can buy it – you can’t sell it. Finding buyers is the key to selling. This is because buyers drive the market and the rates per acre, no matter the land use. The more buyers there are, the higher prices become because land is so limited. They’re not making more of it at a factory, they’re not pumping it out from under the ocean. So if there are lots of people looking to purchase it, prices go up and sellers tend to make more money on the land and likewise more money on the timber on it.
We’ve covered a lot of ground today with this post. We simply wanted people to be more informed in making land buying and selling decisions, especially when it comes to land with timber on it. Remember, the value of the land today and the timber on it, plus future timber revenues are important in finding your sales figure. Next, finding buyers for your property is what’s most important.
Feel free to ask us a question about anything here, or some property you’re looking to buy or put on the market.