How to make money growing trees – Investing in timber plantations
Do you own a little bit of land? Does your land have a lot of trees on it? If you’ve answered yes to both questions, you may very well be sitting on a goldmine. Did you know that you can make a lot of money selling your timber? Just remember that the profitability of your venture is going to depend on a handful of factors, including your location and the type of trees you’re working with. Still, everyone with land and trees should think about selling their timber. Below, you’ll learn more about making money from your timber.
Determining The Timber’s Value
As mentioned above, the type of timber you’re working with can have a major impact on its value. In other words, there are certain types of trees that are worth a lot more than others. You will definitely need to do some research regarding trees to find out what you’re dealing with. If the trees can be used as firewood or furniture, you’ll probably be able to make a lot more money. At the same time, you have to consider whether you’re going to be selling stumpage or logs. Stumpage means standing timber.
The truth of the matter is that selling logs is going to be much tougher for you. You may not even have the means or tools to convert your trees into logs. After all, you’ll have to cut them down and process them. It requires a lot of equipment and capital to do it on your own. Alternatively, you might be able to hire a company to do it for you. If you decide to take this route, you need to make sure that you’re thoroughly familiar with your trees and their value. You may also need to go through certain channels to obtain permits, licenses, and approval. You’ll also need to hire employees and rent equipment.
Selling logs is the best way to maximize your earnings. The only downside is that it is much more difficult.
If you prefer to keep things simple, you’ll want to think about selling stumpage or the standing timber. This will prove to be much easier for you. After all, the buyer will be responsible for harvesting and processing the timber. In most cases, people who actually own woodland will prefer this method. It is true that they might not make as much money, but it is so much easier in the long run. It is possible to sell standing timber in lump sum or sale by unit. Lump sum means that you’re going to be paid a specific amount that has nothing to do with the actual volume. With sale by unit, the process is a little more complicated. This is true because the timber will need to be harvested and weighed before you can be paid.
All in all, selling your timber is definitely a good way to make money. Still, you have plenty of choices to make. Doing it on your own is more profitable, but more of a headache too. If you just want quick money, you should sell the stumpage as a lump sum.