In this series of videos, Grant Massie's resident forest experts share information about timber and how to maximize timber as an investment. Ned : Bill, I know that you're a certified general appraiser so you get called upon to do appraisals of timberland and land that has standing timber. Often the discussion is the benefit of selling the timber and then selling the land or selling the two of them together. You've noticed some relationships. Would you share that with us? Bill: A lot of appraisers look at it a little bit differently. Some say you take the value of the dirt and then you add the value of the timber which usually when you do that you're probably coming up with too high a value. Because there is some risk with standing timber. You could have weather that could destroy it, fire, that type thing. Ned : Bugs. Bill: Yeah, bugs also would do that. That built in risk that you have when you sell them together, you're probably taking a discount on the timber to a certain extent. Also you get into areas where the timber is not of a high quality and when you remove the timber you reduce the value of the property probably more than you'll get from the timber. This is an area that you particularly have to be careful with when you're advising a landowner as far as selling, whether they should sell the timber separately or whether they should sell it together. Like I say, the aesthetic value a lot of times of a stand of timber is greater than the timber value itself. Those of the areas that you have to be cognizant of when you're advising a landowner as far as the sale of their property and/or timber. Ned : By selling them together you give, also, the buyer the option of deciding whether to continue to hold it as timberland with standing timber or to sell as opposed--Have you ever had the experience where somebody harvested the timber and tried to sell the land and you decided well, a buyer came on and said, "Well, if I still had that timber, I'd have bought it?" Bill: Sometimes, yes. It's one of those areas where if you've got a real high quality stand sometimes it's better, too. You go ahead and sell the timber separately but then to sell the land may be more difficult after that but from a dollar standpoint, and there again, usually that happens with the, if it's a very high quality and high volume stand. Ned : Thank you Bill and Jeff for sharing your information about timber and timberland as an investment. We hope this information has been beneficial to you and that you will come back and visit with us again soon. Thank you. END OF PART 10 (OF 10)
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