As with residential property, there are steps a landowner can take to add value and make forest acreage attractive from every angle. As a land broker and professional consulting forester, I’m often asked what improvements can be made to add the most value to forest property.
My response focuses on two different sets of property attributes that affect value. The first set is acquired at purchase and includes characteristics inherent to the property. These are fixed attributes such as location, public road frontage, streams, and topography.
The second set of attributes can be implemented or improved upon, creating an opportunity for “acreage appeal,” which is the forestland equivalent to the curb appeal concept in residential real estate. These are improvements that have the potential to increase the marketability and value of your property above the investment expense. Our firm operates across North America, and these six areas are improvements that seem to be universal regardless of market.
“The importance of working with a professional land manager and broker cannot be overstated.”
Access is a critical component of value and often the first question posed by potential forestland buyers. Having legal access, of course, is key to marketability and upholding property value. A tract without legal access poses many impediments to potential buyers.
If it is a recreational tract, buyers might be uncertain about their ability to easily enjoy the property. For investment tracts, a lack of legal access can impede the ability to extract value in the form of timber sales or hunting revenue, to say nothing of the potential development value down the road.
The investment buyer is likely to discount the standing timber value to account for these challenges. If your property does not have a recorded legal access you should work with some combination of your adjoining neighbors, a land professional, and an attorney to evaluate your options and make a plan to obtain access.
Once you have legal access, creating or improving internal tract access is another strategy to increase acreage appeal. If internal roads exist, funds are well spent to upgrade and improve these roads to ensure they are easy to drive and stable in various weather conditions. This can include smoothing of the road surface (grading), installation of erosion control measures (water bars), seeding, and replacing damaged culverts.
If you do not have interior roads it could greatly enhance the value of your property to have roads built. New roads should be constructed in a way to provide useful access and in locations that will require the least amount of future maintenance. This involves using the existing topography of the land to minimize the slope of the roads (and erosion potential), and limit the number of stream crossings. Choose crossing locations most likely to withstand storms and require minimal maintenance.
In a similar vein, laying out ATV trails or walking trails also can add value. Being able to showcase a property’s Highlights on an initial tour helps create favorable first impressions. Trails should highlight a property’s unique assets such as water features, views or vistas, cultural features like old home sites, large trees, or favorite hunting spots.
Well-marked property boundaries are a bellwether for good land management. They signal to the public that this property is frequently attended to and minimize the risk of trespassing, dumping, or squatting. The first step to improving boundary markings is to make sure you have a modern survey description that is accurate. The second step is to mark your boundary clearly with paint. Surveyors have customary ways of marking lines so the exact location of the line and corners can be quickly identified. This is done based on the orientation of the paint and shape or number of painted markings on trees or posts along the line. For example, three painted bars on a witness tree typically denotes a corner in the area in front of the marked tree.
Well-managed properties always realize a premium over un-managed or neglected ones, and buyers can spot the difference from a mile away. Attention to access and boundaries signal active land management, but as a landowner you also should have a written forest management plan for your tract that guides your goals and documents past activities. A little organization With this information imparts a huge degree of confidence to the buyer. Consult with a professional on what silvicultural practices will deliver the most return on investment. There might even be cost share assistance from government agencies.
A good consulting forester will be well versed in these programs and can provide guidance on how to qualify. For the private landowner, there are typically programs for activities such as reforestation, site preparation, prescribed burning, road improvements, wildlife food plantings and pre-commercial thinning operations. Implementing management practices that make good financial sense will enhance the income potential as well as the aesthetics of your property.
Though it is typically thought of as an inherent and unchangeable attribute, you often can create water features on a property if there is already a water source available. One of the most common requests we receive from potential buyers of recreational land is for a tract with a pond. If your property has a site that is compatible with building a pond, this can make a huge difference in the value and marketability of the property.
Understanding if you have potential sites to construct a pond on your property and how to go about properly constructing a pond can be an enjoyable experience and a significant value add. Typically you need a reliable water source such as a spring or small stream, soils that will hold water, natural bowl-shaped topography to minimize construction, and earth moving expense.
In some areas, pond construction and permitting is regulated by the state government. That means that the first point of contact should be with your local cooperative extension service to begin to understand what is possible on your property. Once you have determined that a pond is permissible and feasible on your site, carefully select a reputable experienced contractor, and have a plan for managing your pond after it is built. Ponds, like forests, benefit from active management.
The majority of my work is with timberland properties. As a forest landowner, that’s no doubt your focus as well. However, open areas can greatly enhance a property’s appeal, even to buyers looking for timberland. My advice is always to manage natural openings with good forest management, but not to clear land just for the sake of openings. I say this because tracts that have a lot of open acreage might require added continual maintenance time and expense, which could narrow your pool of buyers.
Natural openings are created during harvest operations when loggers use a specific area for a log landing or loading spot. The resulting opening could be maintained as a food plot with annual or perennial plantings.
Open space can maintain sunlit areas along roads if the vegetation is favorable, and this also has habitat benefits. These open areas allow your road to dry after precipitation, and also provide some habitat diversity to your tract on a landscape level. Opportunities can exist to maintain sight or shooting lanes in thinning access corridors post-harvest as well.
These practices do not remove acreage from timber production but make the best use of every available acre and demonstrate variety in a property. Some of these open areas could be maintained by a hunt club since the openings improve habitat and, thus, hunting. The annual maintenance expense is minimal, and there might also be cost share programs through state or federal sources to assist you.
It might seem obvious, but the first impression of a property often is the entrance. It’s why subdivision developers go overboard with gates and entryways before ground is broken on the first model home.
You need not break the budget in this area, but investing in and maintaining gates at all points of access it will provide security while you own the property, and is viewed favorably by potential buyers. After all, why would a landowner go to the expense of putting up a nice gate if there wasn’t a quality piece of land behind it?
New gates should be properly sized to accommodate any future needs. Consider whether there will be future timber harvests, and the width needed to get equipment through the access point. It is preferable to have the gate installed slightly off the main road so you can easily pull in to open it without having to stop on the road shoulder. The gate also should be installed so that it will not sag and drag on the ground, or not align with their latches properly.
Gates often sag or become unaligned due to not burying the pivot post to which the gate is attached deep enough and in cement. Gates should last a long time, so if you have an old gate, it can be enhanced greatly with a fresh coat of paint.
These are six key areas often discussed with owners and potential buyers of forestland. There are many other opportunities to add acreage appeal. My advice to owners is to consider these broadly appealing improvements first, and then invest in other, possibly more capital-intensive improvements that enable them to reach their goals for the property. The importance of working with a professional land manager and broker cannot be overstated. These professionals can help you evaluate investments in improvements and explain their long-term impact on your property and investment return should you choose to sell in the future.
Chris Miller, ALC, is a land broker and consulting forester for American Forest Management, Inc. and AFM Land Sales, LLC. in Charlotte, North Carolina. This piece was originally published in the July/August 2016 Forest LandOwner Magazine.