With the US economy improving, the timber market throughout the country - in particular southern states such as South Carolina and Alabama - continues to improve, as timber by-products ranging from bath tissue to two by fours increase in demand. As the cash flows possible from the harvest of standing timber increase, so does the attractiveness of investing in timberland. According to two Mossy Oak Properties Land Specialists, timberland is a smart investment in today's climate for a variety of reasons.
"Timberland in a lot of areas of the country became very inflated price-wise," said J.J. Keeth of Mossy Oak Properties in Louisiana. "In Louisiana, Arkansas and even east Texas, our prices did not inflate. And the reason it's such a good investment is because without those inflated prices, we are now selling Timberland at faster than we did in '08 and '09, and it was because the dirt values stayed basically the same."
Buy low and sell high
Even with the uptick in standing timber prices, timberland is relatively cheap right now, and that's ideal for those looking to invest in land.
"Timberland's a great buy right now," said Rick Taylor, a forester and the Owner of Mossy Oak Properties Forest Investments. "The old adage with the stock market is buy low and sell high. Timber prices right now in general - pine timber prices anyway - are roughly the same thing they were in the late 70s. So if you want to buy a good investment at a historically low price, today's the time to do it because when this economy turns around, the price of pine timber's going to go up."
Taylor also commented on what he called "the beauty about timberland as an investment" - the fact that as long as you are holding your timber, it continues to grow, "so your gains are compounded by the annual growth of the timber."