Now is the time to make a good land investment!

This site features Alabama land for sale in Chilton County, Coosa County, Morgan County, Cullman County, Winston County, Blount County, Saint Clair County, Etowah County, Talladega County, Clay County and Cleburne County. These tracts are listed by Eddie Stone, REALTOR® for Great Southern Land, LLC. Eddie is the North Alabama Land Agent for Great Southern Land. Being a Realtor and Registered Forester, he is uniquely qualified to guide investors through the process of investing in land.

This site features several types of properties, such as:

 

Why is Timberland a Good Investment?

Timberland is Uncorrelated to the Stock Market

Trees don’t know about wars, bear markets, housing crises, job losses, fuel prices or any other factor that negatively impacts the economy. Trees just keep growing year after year. So investing in timberland is an excellent way to balance your portfolio as its value rises even when stocks are falling. Timberland is negatively correlated with other components of the portfolio. Because timberland investments tend to move counter cyclically with stocks and bonds, and independent of the real estate sector, timberland can provide portfolio diversification. By managing the timber growth and subsequent harvests, the forest investment could be structured to act and behave in many respects like a long-term bond.

Trees Grow

Trees grow; the growth is compared to the interest earned at a bank. This growth is a hedge against price fluctuations. Returns from timberland investments are not only from biological growth but from upward product class movement, timber price appreciation, land price appreciation, and management/marketing inputs. The biological growth of trees makes up most of the returns of a forestland investment. Biological growth ranges from 3% in an unmanaged natural stand to 12% in an intensively managed highly productive plantation, with the average ranging between 6-9%. Upward product class movement comes from a tree moving from pulpwood to sawtimber, the two basic products derived from a tree. The value of sawtimber is about two to four times the value of pulpwood; therefore, as a tree grows, more of its volume is allocated to sawtimber. Value is being added as volume growth and product upgrade. In regards to timber price appreciation, there has been and is expected to be a strong demand for the South’s forest resources. Prices may fluctuate on the short-term but over the long-term are expected to increase. Timberland price appreciation is partly derived from the value the land itself can produce. Forest practices continue to improve the production from the land. Combine the improved production with timber price appreciation, the overall value derived from the timber will increase; therefore, causing the underlying value of the land to increase. Also, the land itself can increase in value independently of the timber influences. Increased demand for recreational property and geographical factors can both positively influence the value of timberland. In some areas these influences far out way the positive effects from the increased value from timber.

Historically, investments in timberland have provided total real returns (net of inflation) of 6-10 percent, and nominal returns of 9-15 percent.

Relatively Low Risk

As stated earlier, trees do not know of the outside forces that affect the economy, they just keep growing. As timber is growing it is standing on the stump. This storage of inventory allows flexibility to the investor. For example, investors can increase or delay the timing of harvests according to the price of the timber products. It also enables the forest manager to predict with relative certainty the volume and value of future harvests. Also, the investor can time revenues to match their own objectives, whether it is to meet a certain need or fill in gaps when other investments are depressed.