Timber Rights

[Horselog]

Does anyone have experience around timber rights?  I own a few hundred acres of forest where I'm looking at selling the real estate and retaining the timber rights.  I know in parts of the country this is common practice, but I haven't been around it a lot.  I'm looking at what's involved to actually keep the timber rights, different ways to structure it, and general rule of thumb numbers for what property is worth without timber rights.  I know every area is different, just curious to see if there's general accepted numbers.

[nativewolf]

Howdy.  Interesting question:  

You have to define the harvest boundary, how much land they have for home sites, can they pick homesite or will you designate it, can they clear land for farming, who has mineral rights (because that will trump the timber rights if they have already been sold), what easements give access for timber harvest (I am guessing you will do horse logging but you still need landings and the more the closer the better just like any other harvest).  The value of a few hundred acres of poor condition cutover forest is a good benchmark for the actual target sale value and that might not be the news you are hoping to hear.  It won't be an easy sale in my eyes because that is a huge encumbrance for a property that  has a lot of competition in the market.  Other ways to get to the same outcome might be more attractive, send me a PM and we can meet and discuss.

[Southside]

It will definitely be an obstacle to a sale. I think every piece of land I have ever seen that has a ROW / easement across it has been trouble. Not a case of if but when.  

Personally I would never buy land with reserved timber rights, even if I got out of the business. Just too many variables and potential pitfalls and the only solution is to go to court where only the lawyers win.  

[Don P]

Hey Ben,
Just another thought. The land across from and abutting me, around 350 acres, was bought by a doctor and logger who were in business together. Mark basically built a subdivision of roads and then lightly harvested to open up potential homesites and thin it out. I bought a few loads which was convenient for both of us and the rest went to C&B and Independence. Then they marked out and sold lots. One of the adjoining neighbors bought several. They built a spec log cabin adjoining me, it has sold twice now. It's another way to get some timber and sell the land at higher value but it also fragments the land.

[Wudman]

The company I work for has a number of "Timber Deeds".  We own the timber but have no rights to the underlying ground.  Most of these are carry over from many years ago.  The ones that I am familiar with are 99 year leases and they are approaching maturity.  Another avenue is to sell the land and reserve the timber rights for a set period of time.  We do this on a regular basis.  Most are short term deals (less than 2 years timber reserve) to allow for timber harvest.  Often these sales are to adjoining landowners that don't have the finances to acquire the timber, but can purchase the bare land.  Appalachia without timber rights could be a tough sell unless you have minerals under the land.  That might not be the type of buyer you are looking for.

Wudman

[Southside]

How do the odds of renewing those those leases look?

[BargeMonkey]

 I've never heard of selling just the timber rights, yrs ago mineral rights where sold here. The hot thing up here is selling the developmental rights to NYC, like selling your soul. 

[Wudman]

How do the odds of renewing those those leases look?

With the stipulations in the original contracts, most of them have been cut pretty hard on the tail end.  There is not a lot of short term cash available, so they are not highly attractive for an investor.  However, we have purchased a few of them in fee simple at the end of the lease period.
Wudman

[dgdrls]

Good morning,

HL, whats the long term plan?   Holding timber rights on a tract IMHO makes it a recreational, non-development parcel or investment parcel.
You could set aside a potion as a managed forested tract and hold the harvesting rights and sell the balance unrestricted.  In the event of a development those
rights would have to be clearly stated in any surroundings deeds that may have an interest in the managed tract such as access for walking trail etc.


Specifically my experience has been in hydroelectric development where the seller reserves the timber rights on lands to be flooded
and had/has a set time frame to clear it.    The other was in a golf course community where the rights to "manage" golf-course lands and
"vegetation/trees" was reserved specifically

D

[John Mc]

A lumber company in my area has done this a few times. They sell the land, but retain the timber rights. They'll set aside a building site of a couple acres (or as negotiated with the buyer) and the buyer can do what they want with that section. They retain the rights to manage for timber and have access to the property.

I don't know how the pricing generally shakes out, but do know that it is heavily based on a cruise to establish the value of the timber rights.

In the end, it worth what a willing buyer will pay for it. I would not buy a parcel where the timber rights were held by someone else in perpetuity. (I'd consider it for a specified period of time - maybe 10-20 years - as long as there were protections to assure it didn't get raped prior to the termination of the timber rights.) Others may feel differently - as evidenced by the property on my north border that sold to someone about 10 years ago where the lumber company that owned it previously retained permanent timber rights.