VALDOSTA -- Investing in timberland can be very lucrative, depending on the market, but is only for those with the time and patience to wait 15 to 30 years for their investment to mature.
"The majority of the timber our company buys is from non-industrial private landowners. We harvest a small percentage off our own land, but most of our supply comes from private landowners," said Wesley Langdale, vice president of land management for The Langdale Co.
"Most people own less than 100 acres and either inherit it or use the land for other things, such as hunting or fishing," said Larry Fudge, vice president of procurement for The Langdale Co. "When they're ready to sell their timber, we can go in and clear cut or do a selective harvest, where we only cut certain trees. It just depends on what the landowner wants."
Both Langdale and Fudge said they are frequently approached by people who want to know how much their timber is worth. "We perform a timber cruise to assess the property and estimate the value of their trees. We go on ground to determine the quality and quantity of the trees and then give them an estimate based on a number of factors including geographic location, quality, age and size," said Fudge.
The Langdale Co. provides cruising services for free or a landowner can use a forestry consultant, who can also help them market the timber.
Most land is sold through a sealed bid process. All interested sawmills perform their own cruises and then submit bids, with the highest bidder winning the right to cut the timber. "It is extremely competitive and not unusual to have 10 or more bidders," said Langdale. "The more sawmills you have competing, the better price that landowner gets for his timber."
Fudge said selling timber is just like selling a house -- the price is determined on the location, the quality, and how many people want it.
Ronald Ratcliff, a licensed real estate broker, certified appraiser and forestry consultant, said the timber market can fluctuate just like the cattle or hog market, and it is only for those who are able to invest for the long term.
"We see some people who are investing for their retirement or their child's college education," said Ratcliff. "If they buy land with five-year-old trees, then they only have to wait 10 or 15 years before the timber can be harvested."
While the landowner is waiting for his trees to mature, Ratcliff said there are a number of ways to make money from the land. "Landowners can sell the pine straw or sell hunting and fishing leases. They might even be able to make enough to pay their property taxes each year."
While Georgia imposes a timber tax, which is paid on the sale price of the timber when it is cut, Florida does not. And in Florida, there is no state income tax, so the landowner only has to pay on the capital gains on their federal income tax. But while there are advantages for Florida landowners, the land itself is also more expensive than it is in South Georgia, according to Ratcliff.
"If someone is interested in buying timberland as an investment, they need 40 or more acres if they want to get serious about it. If they have less than that, it's harder to turn a profit," said Ratcliff.
Langdale described the Southeast as the "Wood Basket of the World," and said the rest of the country is relying more heavily on this region for timber. "We are more willing to grow the trees and manage the land. There is a lot of pressure on this region to produce."
And with almost 70 percent of the timberland in Georgia in private hands, the importance of the individual landowner can't be underestimated.
To contact reporter Kay Harris, please call 244-3400, ext. 280.
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