Ray Camp, Inc. Consulting Foresters, Appraisers: Services
Planning & Appraisal
Land appraisals for forested property require the specialized knowledge and experience of someone with particular training and education. Forest land values are based on many factors that are beyond the capacity of ordinary real estate appraisers. Virtually all of the leading real estate appraisal text books strongly advise appraisers to refer such assignments, or seek assistance of a specialist in forest properties that has the essential background needed.
Timber resource appraisals too are a very special, often-difficult challenge. They are frequently utilized to determine the current market value of a timber investment or a forest estate. The appraisal process, as a minimum will normally require a current inventory of the subject forest property. The data from the timber inventory is then used in association with the market rates for various forest products to ultimately derive an opinion of the overall market value of the timber on the subject property. This process may be complex because the markets are expressed in many units that are often unfamiliar to someone without adequate background and experience in the timber marketing field. It can involve relating various stumpage rates expressed as the per-unit price for standing trees, which in turn may be expressed in either board feet, cords, units, or even weight-scaling by tons.
Due to a number of factors that influence the price of marketable trees, timber prices can change overnight. For this reason, appraisal values are usually considered valid only for the effective date of value of the appraisal. But some factors that affect timber prices remain relatively constant, and the report may remain valid for weeks or even months, and the data, once collected, may be adjusted for growth and price changes without the need for frequent costs to re-inventory the property.
Appraising young timber that is approaching or has just reached marketable size, is done somewhat differently. The value of this resource if often appraised on the basis of the present value of anticipated future growth and yield estimates. This process is completed in three steps:
Predict the growth of the trees over time with a growth-and-yield model.
- Apply current (or effective-date-of-value) stumpage rates to future volumes.
- Discount the future values back to the present at a market discount rate.
Another method is to appraise timber at some point in the past, by measuring and deducting the historic growth of the trees and then applying the historic stumpage rates.
Ray Camp, Inc. helps to choose the right appraisal method and leads clients walk through the process.
Phone: (479) 968-7752