Thursday, October 21, 2010

Why Invest in Timberland?

Timberland, when added to a portfolio, offers many benefits to the investor.  These include diversification, stable and predictable cash flows, and superior risk-adjusted returns.  Due to the negative correlation with other investment classes (stocks, bonds, etc.), timberland can diversify a portfolio to protect the investor from downturns in traditional markets. 

Investors have the option to wait out weak markets without losing value.  This is due to the biological growth of trees.  Basically, that means that regardless of market fluctuations, trees continue to grow and increase in value.  Growth rates vary depending on the site and species of the trees.  An average growth rate is 4%-6% per year.

Timberland investments usually include the underlying land.  This enables investors to capture the land appreciation upon sale of the investment.  Owning the land also allows for additional revenue generation from hunting leases, mineral leases, and other sources throughout the life of the investment. 

Timberland has historically proven itself to be a safe, reliable investment.  It is a good option for investors hunting for a safe investment with high returns. 

Wednesday, October 6, 2010

How To Search for Your "Dream" Hunting Property

I work in the land business.  I  buy and sell timberland, hunting land, farms, recreational property and weekend get-a-ways.  During the fall, many clients are interested in purchasing hunting and recreational property.  With hunting season in mind, they are motivated to find their "dream" property.  This is an exciting time for buyers searching for a great place to call their own.  In my area of the South, there are some good deals available for hunting and recreational land.  In the past few months, I have seen some beautiful property that is available for purchase.  If you are looking for hunting land, now is a great time to get into the market.

If you are interested in buying your "dream" property, there are a few things to consider.  First, you need to have a budget in mind.  It is important to know how much money you can spend and your realtor should respect your budget limits.  Even if you are looking for a good deal, you still need to have a clear understanding of the top of your budget.  Next, it is good to have a general idea of the location you are interested in or the maximum amount of time you are willing to travel.  It is also good to have a clear understanding of your goals of the property.  Is this a place where you would like to build a home and retire?  Is this a hunting camp for the family or a group of friends? Is this an investment property that will also include benefits of recreational pleasure?  Are you willing to invest money in the property initially to improve the roads, fences, and fields?  Are you interested in harvesting the timber or planting additional trees on the property?  All of these are questions that can be addressed with your realtor.  One of the benefits of working with a realtor that has a forestry background is they have experience dealing with timber prices and the costs of harvesting and reforestation.  They are able to give you an accurate appraisal based on a timber cruise.

When searching for your "dream" property being prepared and having a clear idea of what you want will make the process much easier.  Make sure you have a clear understanding of your needs and that you communicate with your realtor.  This will ensure everyone is one the same page and clarify the process.  Lastly, be patient and persistent!