From the desk:Timberland / Vineyards / Orchards

He says the timber on 35 acres is worth 40k. How would I check?

This isn't the rental I've been posting about. My parents' neighbor is selling 35 acres about two hours out, mostly mixed hardwood with maybe 8 acres of planted pine along the road. Asking 132k. He says "there's forty thousand dollars of timber standing on it" and treats that as a discount off the dirt price, like I'm really paying 92k.

What I've got: county says the land is assessed at 2,100 an acre, there's deeded road frontage, and the pine looks planted in rows so someone put it there on purpose. What I don't have is any idea whether 40k is a real number or a number he made up over coffee.

I've read that you can hire someone to measure standing timber, but I don't know what that costs, who does it, or whether the seller would even let me on the property with a stranger before closing. And I don't know if hardwood and pine are priced the same way, because everything I read talks about pulpwood and sawtimber like I'm supposed to already know the difference.

The part I keep circling: if the timber is only worth 12k, is the land still worth 132k on its own? I don't know how to answer that either. Closing is supposedly 45 days out and I haven't made an offer yet.

Answer

1dpatel_reCS4A

The word you want is cruise. A consulting forester walks plots across the tract, measures diameter and height, and gives you volume by species and product class. Pulpwood is small stuff that goes to paper or chips and is worth very little per ton. Sawtimber is big enough to be sawn into lumber and is worth several times more per ton. A stand can look identical from the road and be either one.

Cruises around here run roughly 8 to 15 an acre with a minimum, so call it 500ish on 35 acres. Cheap relative to the number you're arguing about.

Two things matter more than the seller's 40k. First, ask for the cruise data, not the summary, meaning tons per acre by product. Second, stumpage price (what the landowner gets for standing trees) depends heavily on how far the tract is from a mill and whether trucks can get in. Same trees 60 miles further out can be worth half.

And 40k of standing timber on 35 acres of mixed hardwood would be about 1,140 an acre. That's not impossible on a mature stand, it's just on the high end of what I'd expect without seeing anything. Make your offer on the dirt and treat any timber as upside you verified yourself.

4 replies

4priya_n21PO1C

Just so you're not surprised later: this thing produces no income between harvests. A 35 acre hardwood tract might throw cash once every 20 years if that. I wanted income and land was the wrong door for me.

2laurenkim53Passive

I buy in this price range and the pattern I see over and over is sellers pricing timber twice. He wants dirt value plus timber value, then calls the timber a discount. In my county 35 acres with frontage trades on the dirt and the road, and the standing wood only moves the number when it's a real merchantable stand somebody's already cruised.

Check the access hard. "Deeded road frontage" and "a truck can get a loaded log trailer out of there in February" are different facts. If a logger can't reach it, the timber is worth zero to you until you build something.

Also ask when it was last cut. If it was high-graded 15 years back (best trees taken, junk left) you've got a stand that looks full and prices like nothing.

1tashaford30PB2APRO7

One more thing before you offer: how the purchase price gets split between land and timber affects your basis if you ever cut, and the rules there vary, so ask a CPA who handles timber before closing rather than after. I asked mine too late on a small parcel and it cost me paperwork I could've avoided.