Buying your first forested property can quickly turn into a nightmare if not researched. You can make the process much easier if you develop a plan.
Here are tips with links that can help. May I also remind you to use available legal and technical professionals as your budget will allow. Foresters, lawyers and accountants will help you insure that the property is what you really want and that you are legally protected after all transactions are nailed down.
All you really have to do is find out what the property is worth and how much you are willing to spend to acquire the property. Alas, the devil in these details! Finding a fair market value for land and timber and knowing what you have to pay for the property isn't always easy - and they are not determined using the same methods.
Initially, you need to brush up on tree measuring and selling. The timber value in many cases will be as much or more than the land value and tax considerations make timber valuation necessary. A forestry novice will be quite lost without putting in some minimum study time. I would suggest you take the time to review Measure and Sell Your Trees and it would not hurt to take my Basic Forestry eCourse.
You need to put a value on the property (separate land value from timber value) and determine the amount you are willing to spend. Make sure that the seller legally owns the property. Make a timber analysis to determine tree volumes and values. Get a good estimate of bare-land values in the area. Also, you need to explore what costs and revenues you will incur as you manage the property. This includes taxes, timber sales/management expenses and hazard risks. A forester should be consulted.
The biggest question when buying property is what you can afford to spend on land and trees. There are many formulas that can assist you, but the main questions are these: What is the competition for your particular property? Competition can influence you final offer. What is the current price for timbered property in the area? You must know what others are paying for property. Ask yourself why is the seller selling?
According to expert Mark Bice, RMS Inc, knowing why a seller sells can be beneficial. Various reasons including divorce, estates, taxes and death will encourage a quick and reasonable sale.
