Learn how to sell timber on your land and add supplemental income to the bottom line of your investment.
Land flipping is an extremely profitable business, but you can add to your final profits by harvesting an often overlooked commodity: timber. The trees on your property are there for more than just looks, or to be a nuisance. Lumber companies can, will, and have paid large sums of money for the right timber and your potential investment into the harvesting of that commodity can line your pockets with that much more income you may not have taken into consideration when you made your initial investment. Here are some easy tips to get you started on the right path to maximizing every ounce of value your property and timber can offer.
Don’t guess: plot out the actual property lines of the land you own
So many landowners truly have no idea where their property begins or ends. While this does feel a tad antithetical to the principle of land flipping/ownership, it doesn’t always make sense to know the limits of your property down to the very inch. In the case of harvesting your timber, however, you must know EXACTLY how far you can go to the finest edge of your land. The companies who will come out to cut down the timber need to know where they can, and most importantly, cannot cut down trees. If you only give them a basic range of plotting, there can be a lot of guesswork, and even potential lawsuits from your neighbors if you impede on their property. As such, this means more time because of the guesswork, and more money you have to shell out to the timber company because of the labor costs. Let alone the fiscal risk of property encroachment.
If you do not already have the appropriate information for your property lines, you can still find it out. Your first option is to go to your local town hall, city hall, or even courthouse for plats, deeds, and tax maps. Plats are your best bet, but deeds often contain enough information (and sometimes even maps) which can help suss out your actual property line. Tax maps are not always the most accurate option either – but they are a great indicator of where your municipality interprets where your property begins and ends. To that end, if there was ever a dispute over a certain amount of land between yourself and your neighbor, you can always fall back on the authority of the municipality to back your claim.
Upon verification of your property, you have a few options.
- 1. Call a surveyor to walk the property and physically draw out the lines that serve as your border.
- 2. You can do it yourself, but make sure you follow the proper protocol to indicate border lines.
For example, a tree with three spray-painted lines indicates that it is a corner of your property. As such, check with your timber company to ensure the proper markings for your land, and be on the same page for their interpretation of what you are trying to mark out.
Understand the value, and the goal you are trying to accomplish by harvesting/selling your timber
Here is what not to do: cut down every single tree on your property (also known as clear-cutting) without knowing what you are getting into. Sometimes clear-cutting can be healthy for a forest, but, in many cases, it is downright harmful and you need to know which is which. Not only is making uninformed decisions, not smart business, but it is actually quite harmful to surrounding ecosystems. How many animals are you displacing by cutting down trees? What is going to be the actual physical damage to the earth below? The questions go on and on.
As the landowner, you have to balance the effect of cutting down trees on your land to the land itself, against the profitability of selling every ounce of timber to maximize profits. But you must also consider the value to your land by KEEPING the trees on the plot too.
In other words, what are you looking to do with your land? Do you care about its use? For example, is your intent to flip it to a developer? If so, keeping some mature trees could be beneficial because it will make the land more attractive for homebuyers – but also the developers because it’s one less tree they have to plant. Or, do you simply want to suck up every ounce of its value and then let the lack of trees be someone else’s problem? Is it legal to do that? Sure. But, what are the moral implications – if not the aesthetic implications of that decision?
To help you make that kind of decision, you have another resource to tap into and that is your local forester.
What Is My Timber Worth?
There are plenty of considerations that go into the value of your timber. 1. What is the local market dictating? In other words, your land may be close to a mill – therefore, your timber might be near a mill. So, the closer you are, the more likely you are to command a higher price.
Also, what are the sizes and species you are seeing on your land? How much are you looking to offload? The more you can sell, you will achieve a higher price per harvest. Lastly, consider where your timber is located within the ecosystem. If your land is near streams or other bodies of water, the cost of harvesting will go up, which in turn means a smaller profit margin for you.
What does the profit structure of selling timber on your land look like?
In addition to the normal labor and equipment costs for operations, the buyer must factor in costs such as social security, workers’ compensation, equipment depreciation, insurance, and interest on invested capital.
From the landowner’s perspective, tree size and quality are important. A well-developed plan with your local forester will provide details regarding which portions of your property are most productive and which are least productive for growing trees. Knowing where these sites are will help you focus future efforts to produce high-quality timber. Keep this principle in mind while managing the trees in your forest.
Quality is equally important to the buyer. A poor-quality tree may have no value as veneer or lumber, while a high-quality tree of the same dimensions may be worth hundreds of dollars. Defects lower the grade and, consequently, the value of trees.
Ok You Have Your Value, How Do You Sell Your Timber?
Selling timber is not simple, and you probably have never done it before. This is when you truly need help because there are many potential ways in which a landowner working without professional forestry expertise can fall into major traps.
Call in the expert forester to help you understand your land and even help you develop a timber plan for free
Foresters are one of the most valuable resources any land owner can use when it comes to harvesting timber. Why is that? Because they are literally experts in the health and expansion of forests. They have their fingers in every aspect of the tree industry. They can help you identify every species of tree you have on your property, and, in some cases, can help you develop a plan for your forest management all for free.
Foresters come onto your site, walk the property with you, and are there to assist in any questions, comments, or concerns you may have concerning the timber on your property. In fact, because they have such a pulse on this industry, they can even provide you a list of vendors to which you can sell your timber, or even how to utilize certain government programs to aid you in your endeavors.
If you choose a “selective cut”, do not “high grade” your land
If you have decided to clear-cut your land, then that is your choice. Your other option is to do a “selective cut” which means you cut trees down, but leave some behind for whatever purpose you deem necessary.
Here’s the catch with “selective cuts”, though: you cannot employ a method called “high grading.” This is a method that cuts down all the best trees (for the sake of your bottom line) and leaves everything else because it’s just not as valuable as the best material. “High grading” can be even more harmful than straight-up “clear cutting” because it leaves behind lesser quality trees (like those that are diseased, hollowed, or mangled) to vie for the same resources such as water and sunlight. This is problematic because these damaged trees do not produce the same kind of seeds as their stronger brethren, and that makes for a much weaker forest as time goes on.
This is, again, where the forester comes into play for you as the land owner. They can help you understand what it is what, and help you develop a plan to maximize your profits without having to sacrifice too much in the way of the health of your land.
Do yourself the favor of getting multiple offers
To get yourself the best possible deals, and avoid scammers who will offer you a price that seems too good to be true, make sure you seek out multiple offers for your timber. In this instance, it is a very good idea to trust your local forester because they know who is legitimate, and who simply wants to ruin your day.
With the help of your forester, you can suss out the bad apples and receive more healthy bids. The more bids you receive, the more you can rest assured that you’re selling timber at market value.
Know who you are dealing with, understand their goals, and make sure you aren’t left with damaged property after the timer has been harvested. Here’s a pro-tip: always deal with a company that has plenty of references. That may sound self-evident (and it should be!) but there are companies who will come in with an outrageous deal and no references – and many people choose the money over the reputation. Unfortunately, they are usually left with a disaster on their hands because of shoddy work done by a company that didn’t know what they were doing – thus hurting the bottom line of profit.
What to Do After Harvesting Timber
Selling timber can be a major overhaul of your land. Here’s a big issue for many people: as soon as the harvesting company leaves, and the foresting consultant bids you adieu, you might have a little bit of buyer’s remorse. Sure the money in your pocket is good, but you might have just leveled an entire system of trees and life (especially if you do a clear-cut). It will look drastically different and you are going to have to get used to not seeing the normal plant life. But, what do you do in the meantime?
Get out there and re-plant some new trees and/or shrubs. Preferably both! If you plant them in a cage, please keep doing that to ensure no funny business from your friendly neighborhood rabbit. Another tactic is to minimize erosion by seeding roads and paths with annual and perennial plants.
There are many routes you can take to harvest and sell timber on your land but the most important part of doing so is to understand your purpose. What are you trying to accomplish by harvesting your timber? Once you understand your goal, you can then reach out to resources like regional foresters and/or forester consultants to maximize your intent.
