Before you clear your land, have you ever thought about selling the timber? It is possible to sell your trees for use as timber, and you could even make enough money to cover the cost of having Nothing But Chips clear your land.
While it can be a complicated process to sell the timber, the potential earnings may be worth it.
If you have ever asked, “How do I sell my timber?” this article is for you.
Talk with a consultant.
First, I highly recommend reaching out to a professional to determine the potential worth of your timber. You have a couple of options here. You can hire a fee-based professional consultant, who can help you prepare your timber for sale and supervise the process. Or, you can reach out to the Tennessee Department of Agriculture’s Forestry Division for their assistance in the process.
This is important so that you have an understanding of the value of the timber before signing a contract for the sale. A consultant can also help you navigate the Tennessee laws regarding forestry management and harvesting of trees to make sure that you’re doing everything properly.
If you’re looking to replant or reuse your land after the harvesting of the timber, a consultant can help you with recommendations to ensure that your land will be usable in the future.
Understand how timber value is calculated.
Not all forested areas are created equal when it comes to determining value. There are several variables that you’ll want to understand, including:
- Species of trees available and the quality, diameter and height of those trees
- Current regional market value of timber
- Specifics of your forested area, including how easily accessible it is and its growing conditions
- How much timber is available to be harvested — the larger the area, the more the potential buyer may be willing to pay per unit
When you do finally decide to sell your timber, it’s a good practice to get several quotes from different vendors to ensure that you’re getting the best return. The Southern Research Station of the United States Department of Agriculture also highly recommends that your selected vendor be bonded and fully understands the area and specific trees you wish to have harvested. You should also have a written sale contract before any work begins.
The other thing to keep in mind is how you want to sell your timber. If you’re going to have the timber cut in advance, thereby selling it as a cut product, the IRS rules regarding the income you receive from the sale differ from if the tree was harvested by the seller. The University of Missouri Extension explains it this way: “Once a tree is no longer on the stump, you are dealing with a cut product and thus must claim the proceeds as ordinary income. The option of claiming capital gain is no longer possible. In addition, you will have to pay a self-employment tax.”
The University of Missouri Extension offers a comprehensive guide on selling timber that is worth reviewing, although be sure to check with the Tennessee Forestry Division to make sure all local laws are being followed. I also highly recommend consulting the Southern Research Station’s website, which also offers pricing suggestions and a sample timber contract for the state of Tennessee.
Give me a shout today, I’m happy to offer you any advice on how best to handle your timber.