Steven Sparks | Backwoods Land Co.

662.523.4603

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This 294 acre tract in Alcorn County, MS is a turnkey hunting and timber tract. Located just 3 miles from the Tuscumbia River, this tract benefits from its proximity to the surrounding wetlands, which are known to be a key stopover along the Mississippi Flyway. While primarily suited for deer hunting, the fertile creek bottoms in the low lying wetland areas of the property may also create suitable conditions for attracting waterfowl during migration seasons. Walnut is also well known from prime turkey hunting. The combination of varied terrain and water access enhances the tracts hunting versatility.
The natural ridges, valleys, and gentle slopes create ideal movement corridors for deer. These natural features form good pinch points, while multiple cleared areas would make ideal food plots. A 672 sq. ft. manufactured home, featuring 2 bedrooms and 1 bathroom, serves as a convenient hunting camp with power and water. Additionally, power and water and fiber are available at the road (County Road 762), with multiple prime spots along the road.
In addition, this tract features a rich stand of bottomland hardwoods, shortleaf, and loblolly pines. The combination of wildlife and timber make this property valuable in more ways than one.
Conveniently located within easy driving distance to Ripley (18 miles), Corinth (30 miles), Tupelo (50 miles), and Memphis (70 miles), this property offers the perfect blend of outdoor recreation and accessibility.
 
🦌 Prime deer and turkey hunting
🦆 Potential waterfowl opportunities due to lowlying wetland bottoms portion and proximity the Mississippi Flyway
🌲 Rich timber resources: bottomland hardwoods, shortleaf, and loblolly pines
🏠 672 sq. ft. hunting camp with power and water
🔌 Utilities (power, water, fiber) available at the road
📍 Multiple building sites
🏫 Located in the Alcorn County School District
🚗 Easy access to Ripley, Corinth and Tupelo
 
☎️ Steven Sparks 662-523-4503
☎️ Office: 601-209-4882
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Real Estate

From Clearcutting to Thinning: How to Preserve Your Forest and Make a Profit

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So, there was a man named Sue (formerly a boy) who had been dreaming of owning his own land for many years. One day, he found the perfect piece of land for sale at a price of $220,000. He put in an offer of $200,000 and it was accepted. This land tract was 80 acres and had 50 tons of mixed hardwood sawtimber per acre.

After much consideration, Sue decided to take out a 10-year mortgage for the land with an interest rate of 8%. The total interest paid over the 10-year period would be calculated as follows:

The revenue generated from the clearcutting of the land and harvesting the sawtimber was calculated as follows:

$32 per ton x 50 tons per acre x 80 acres = $1600 x 80 = $128,000

With the interest and revenue calculated, Jack could now determine his total loan payoff, which would be calculated as follows:

Loan Payoff = Loan Amount + Interest – Revenue from Sawtimber

Loan Payoff = $200,000 + $70,963.92 – $128,000 = $43,963.92

Sue soon discovered at the advice of a local appraiser that clearcutting the land would not only strip the area of its beautiful hardwoods, destroying the forested landscape, but it would also decrease the land’s value by at least  50% due to the harm to its appearance and loss of forestry. To balance his financial needs and protect the forest, Sue considered thinning. Thinning involves carefully removing some trees to boost the growth of the remaining ones and enhance the forest’s overall health. By thinning, Sue could still harvest valuable sawtimber while preserving the forest and possibly increasing its value. Sue also learned that hardwoods take around 100 years to regrow after clearcutting, whereas say, loblolly pine regrows in just 25 years. Choosing to thin the forest rather than clearcutting would preserve it for future generations and generate income to help pay off the loan faster. This was more appealing Sue concluded that clearcutting would bring a short-term financial gain but cause long-term harm and decreased value.

Had he clear cut the land instead of thinning, a prescribed burn could be an effective way to promote forest health and regenerate the hardwoods. A prescribed burn is a controlled fire set by trained professionals such as foresters to reduce the risk of wildfire, improve wildlife habitat, and enhance tree growth. This method has many benefits, including reducing competition for resources, improving soil fertility to name a few.

A forester can also help ensure that the necessary permits and regulations are obtained before conducting any forest management activities. They can advise on the proper techniques for conducting a prescribed burn, ensuring that the fire is set under controlled conditions and that the health and safety of people and wildlife are protected. In addition, a forester can help assess the economic and ecological impacts of a timber cruise or prescribed burn or other forest related activities. They can provide insight into the potential returns on investment and the long-term effects of the activity on the forest and its resources. Overall, it is crucial to consult a professional forester when planning and conducting forest management activities.

Working in collaboration with a professional appraiser experienced in land appraisal can provide a comprehensive understanding of the land and timber value. The appraiser can evaluate the current market conditions, comparable sales, and the timber resources on the property to determine the value of the land and its assets.

Together, the forester and appraiser can provide a comprehensive analysis of the economic viability of the property and the potential returns on investment. They can help landowners make informed decisions about the best use of their land and its resources.

For example, if the landowner is considering a prescribed burn, the appraiser can assess the potential impact of the activity on the land’s value, considering factors such as the potential for increased productivity and improved aesthetics. The forester and appraiser can work together to determine the best management strategy to maximize the value of the property and achieve the landowner’s goals.

Note that this is just an generalized overview of how two methods can be used  on this particular hypothetical 80 acres. One of the many interesting things about real estate is that there is never a right way, but there is always a wrong one. That’s why is so important to consult with experts to maximize your investment and enjoyment of your property.

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Understanding the Differences: Mineral Rights vs Timber Rights

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Jack had always dreamed of owning his own piece of timberland land. He searched and searched tirelessly until he found a property that had large stands of natural regrowth, which was perfect for Jack. Unbeknownst to the owner of the timberland which was a land investment company, a neighbor had just discovered natural gas on his property. In all likelihood, he was going to have natural gas on his land also since the neighbor did.  The contract stated that the mineral rights were being transferred along with the land, so John signed the contract without hesitation and paid for the land.

However, after a few weeks, John received a notice from a logging company that they would be cutting down trees on his property. He was surprised, not to mention outraged. To his dismay, he realized that the contract stated that he was buying the rights to harvest the timber on the land, not the mineral rights.

Feeling misled and frustrated, John tried to get out of the contract, but the seller refused to budge. In the end, John was forced to watch as the logging company clear-cut the forest, leaving him cutover worth 20% of the original market value.

John could have used a land agent and he would have land with the trees he dreamed of.

One of the most important distinctions to make is between mineral rights and timber rights. These rights refer to the ownership of specific natural resources found on a piece of property and are separate from surface rights.

Mineral rights refer to the ownership of minerals, such as coal, oil, and gas, found underground on a piece of property. These resources are valuable as they are used to generate energy for homes and businesses.

When a landowner retains mineral rights in the contract for the sale of the land, they have the right to extract and sell these minerals separately from the surface rights. The landowner also has the right to access the land to extract the minerals.

I have often been asked during land purchase negotiations if timber transfer with mineral rights. Let’s take a look in case you have any confusion what transfers with mineral rights if it is not negotiated for the property owner to keep them in the purchase contract.

Mineral rights refer to the ownership of minerals, such as coal, oil, and gas, found underground on a piece of property. These resources are valuable as they are used to generate energy for homes and businesses. When a landowner retains mineral rights in the contract for the sale of the land, they have the right to extract and sell these minerals separately from the surface rights. The landowner also has the right to access the land to extract the minerals.

On the other hand, timber rights refer to the ownership of trees that are found on the surface of a piece of property. Once the timber is severed from the land, it becomes personal property. These trees can include hardwood and softwood trees, and they are often used for building, furniture making, and paper production. Like mineral rights, these rights can also be bought and sold separately from the surface rights, and the owner of the timber rights has the right to cut down and sell any trees found on the property.

Surface rights refer to the rights to use and develop the land above the ground, such as building structures and using the land for agriculture or recreation. Subsurface rights, on the other hand, refer to the rights to extract and use the minerals, oil, and gas found beneath the surface of the land. These rights can be held by different individuals or entities, and they can be bought and sold separately.

Timber rights can fall into either surface or subsurface rights depending. In some cases, timber rights are considered as a part of the surface rights and the owner of the land has the right to cut down and sell the trees found on the property. However, in other cases, timber rights may be separated from the surface rights and sold or leased separately. This means the person who owns the surface rights may not have the right to cut down or sell the trees on the property.

In some cases, the same person may own both the surface rights and the mineral rights or timber rights. However, it is also possible for these rights to be owned by different people or entities. This can lead to confusion as the rights to extract and sell the minerals or timber may be held by someone other than the surface rights owner.

When it comes to conveyancing (transferring ownership of a property), it’s essential to carefully consider both mineral rights and timber rights. The transfer of ownership must include not only the surface rights but also any mineral or timber rights that may be associated with it. Failure to include these rights in the conveyance can lead to disputes and legal issues down the line.

 

Having a land agent can be extremely beneficial when it comes to purchasing land. Here are a few ways in which a land agent can help:

  1. Knowledge of the market: A land agent will have a thorough understanding of the local real estate market, including current prices, trends, and potential pitfalls. This knowledge can help ensure that you are getting a fair price for the land you are buying.
  2. Expertise in land use: A land agent will be familiar with the different types of land use and zoning laws in the area. This can help you understand the potential uses of the land you are buying, and ensure that it is zoned for the use you have in mind.
  3. Network of contacts: Land agents often have a wide network of contacts, including other land agents, real estate lawyers, surveyors, and environmental consultants. This can be extremely helpful in navigating the complexities of buying land.
  4. Help with due diligence: A land agent can help you conduct the necessary due diligence to ensure that the land you are buying is free from any issues or encumbrances. This can include things like checking for easements, boundaries, and zoning.
  5. Saving time: Land agents have the knowledge and experience to filter through the numerous properties available in the market and can save you time and energy by only showing you the properties that fit your specific needs and budget.
  6. Negotiations: Land agents have the experience and knowledge to negotiate on your behalf to ensure that you get the best deal possible.

In short, having a land agent can be extremely beneficial when it comes to buying land, as they can help you navigate the complexities of the process, ensure that you are getting a fair price, and help you find the perfect piece of land for your needs.

 

 

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Building Value vs Land Value: Can a Building Appreciate Independently?

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The relationship between the value of a building and the land it sits on is a complex one. The appreciation of a building is not solely dependent on the appreciation of the land it sits on, but rather a combination of factors that include the condition and improvements made to the building, the economic conditions of the surrounding area, and, of course, the cost of land.

Is it possible for building to appreciate in value while the land it sits on remains stagnant? It may seem counterintuitive, but it is definitely possible. The key to understanding this phenomenon is to remember that a building’s value is determined by a variety of factors, not just the land it sits on.

For example, you could put a lot money into renovating and upgrading a building, only to find out the value of the land it sits on hasn’t moved an inch. Similarly, you could keep the building in tip-top shape, but the value of the land remains stagnant. Even more ironic, the economic conditions of the surrounding area could be booming, yet the land value remains unchanged. But despite all this, the value of the building still increases.

If the land is the only driver of home values over time, then why on earth is a new constructed single wide over 100k in many cases today? Inflated building costs due to insane demand, historically low interest rates and a shortage of affordable housing to name a few.

In some cases, the value of the building may be determined by factors that are not related to the land, such as the historical or architectural significance of the building, or the zoning and usage restrictions of the land.

One reason is that improvements made to the building, such as renovations or upgrades, can increase the value of the building. For example, if a property owner invests in modernizing the building, such as installing new appliances or updating the plumbing and electrical systems, it can make the building more attractive to potential buyers or tenants, leading to an increase in value.

Another reason is the condition of the building. A well maintained building with good quality construction interiors and exteriors can be more desirable to buyers and tenants, leading to an increase in value, even if the land value remains stagnant. This is especially true with a well maintained high quality home in an historical district or somewhere where say for example are dominated by Victorian, Colonial and Tudor style homes. A certain buyer pool for this type of home may pay a premium for the design and construction itself depending on trends in the area.

The value of the building may be determined by factors that are not related to the land, such as the historical or architectural significance of the building, or the zoning and usage restrictions of the land.

 

When it comes to be land be the main or one of the main drivers in the increase of some values, the building quality and condition means less and the land goes up, especially in areas with much population and economic growth. As land prices soar, builders may find themselves in a difficult spot, struggling to acquire land to build homes on. This, in turn, may lead to builders passing on the increased cost to buyers in the form of higher home prices. But don’t worry, the fun doesn’t stop there! Builders may also have to resort to constructing homes on smaller plots of land, leading to even higher construction costs per square foot, due to the diminishing returns. It’s like a never-ending cycle of joy!

Additionally, when the cost of building materials increases along with rising land values, it can also cause builders to pass on these costs to buyers in the form of higher home prices, making it more difficult for buyers to afford a new home, decreasing demand for new homes, and driving up home values. When land prices increase with stagnating home values along with stagnant demand for new construction, it can also make it less profitable for developers to build affordable housing, leading to a decrease in the supply of affordable housing and driving up the overall cost of housing.

Oh, inflation! The gift that keeps on giving! High inflation can lead to some truly delightful situations such as sky high interest rates and unaffordable rental income.  Not to mention, it can cause prices to drop and the value of a building to decrease, like a cherry on top of a sundae. And let’s not forget the joy of rising land values driving up construction costs, making it even more challenging for builders to acquire land and construct new homes, leading to higher home prices. A party in your bank account!

We can’t simply look at the cost of the land and assume that it directly correlates to the value of the building on it. No, the appreciation of a building is not solely dependent on the appreciation of the land it sits on. It’s a combination of factors that must be considered. Most of the time with real estate, when finding factors that influence value, we ned up digging much deeper than we what saw on the surface.  And that’s probably not just true when it comes to valuing buildings and land, but in all aspects of life!

If you would like to book an appointment or call or text to just to have a chat, call, text or email at (662) 523-4603 ssparks@wwebb.com. Also visit my appraisal blog @  Home – Encompass Realty Solutions  to find out more about your real estate appraisal options.

 

Building Value vs Land Value: Can a Building Appreciate Independently? Read More »