Extra wood on your land can become a lucrative income source if you’re interested in selling it, and getting the best timber appraisals is important. A lot of work goes into timber processing, and you want to ensure you’re getting paid accordingly. Neeley Forestry Services in Camden, AR, suggests there are several approaches to timber appraisals, each with strengths and weaknesses. To ensure you’re getting the best deal, read on to see which has proven to be the most accurate.

Timber Appraisal Methods

1. Compared Sales

Similar to real estate, this method uses previous timberland sales to assess a property. If the timber market value in your area is equal to properties that are closely related, yours will be gauged against those. The more similar it is, the more likely you’ll receive an appraisal that matches their sales prices. While this is effective for setting a baseline, each property is unique and contains certain factors that can’t be compared. Because of this, comparing sales is viable for establishing a range but not the best method for pinpointing a valuation.

2. Expected Return

Rather than assuming a property’s current value, the expected return process values a property based on what it’s anticipated to be worth in the future. This is based on expected year-over-year output. Because there is no certainty to this, it comes with risks, although the rewards—both as a buyer and seller—can be higher.

3. Component Evaluation

The cost approach of timber appraisals does the opposite of comparing sales; it breaks down the individual costs of different factors of the land and adds them together to create a total sum. However, it is similar in that it compares the multiple pieces to other market values. This method’s strengths lie in that it isn’t subject to larger timber market activity and focuses more on the unique features of your land. Because of this, it’s considered highly accurate for valuation because so many elements are considered.

To learn more about appraisal methods or schedule an appointment, turn to the staff at Neeley Forestry Services. They offer comprehensive timber appraisals, along with land and forest management services. Call (870) 836-5981 today to speak with them, and visit their website and Facebook page to learn more about their services.