A recent news cast said the problem with the economy and our financial outlook is that we have no direction from our elected officials. We are faced with more government regulation, more spending and growing deficits. There is no way to plan or develop a strategy for the next several years. No one can give us a clear explanation about anything with any certainty, which has caused a lot of anxiety, distrust and sleepless nights. What should we do and where should we invest? It is clear to me that now is a good time to be frugal, develop a strong game plan and remain focused on that plan.
We have buyers for land and timber and have had good activity in the land and timber market. Part of this is a result of changing capital gains tax laws at year end. Some people are able to find what they feel are good investments and others just need to sell. Some of our success has come from hard work, strong advertising and staying informed about our market. We have seen a fairly stable land market in rural Georgia and South Carolina. This is mainly because we have not seen the rapid price appreciation experienced by urban America. We have had a surge in demand boosting land values and a recent decline, but the core value seems to be steady. Historically, land has held value, is a good conservative investment and is an excellent hedge on inflation. One trend we see is a shift of buyers leaving urban areas and looking for a slower, quieter rural setting.
Another area of focus is agricultural land. Several of the large investment funds are aggressively accumulating farm land. They see a long term demand for food production. China and India have an increasing middle class demanding more food and a larger variety of food. We also will see an increase in timber demand at some point but the current timber market is spotty and sporadic. One of the many timber companies we work with exports a large portion of their product to China. What this means is long term demand for land and the products produced on the land will be a stable investment in an uncertain time. Rural land typically does not see the volatility of the stock market. Land is also a tangible asset, and you can live, work and recreate on it. We feel now is a good time to be considering land as a portion of your portfolio.
Timber sales have been steady with some fluctuation in price. Price has a lot to do with timber type, location, wet or dry site, species, timing of sale, specialty markets and a variety of management and marketing decisions. Our job is to help you plan and manage your investment to accomplish your goals. Different clients have different goals and we tailor a plan to fit the client’s needs. Some products need to be sold now and some held for a better market. Some people just need cash flow, so we get them the best price possible and help them through the harvesting process.
Planning, Focus and Patience
Planning is important for immediate and long range goals. Focus and patience are necessary to see the plan through. Sure, we may need to adapt to some wrinkles in the plan or adjust our strategy. Understanding the land and timber investment you own is essential in developing the plan. Knowing the market, who is looking, what they are looking for and what is available is our job as a professional working for you. We understand what is involved in evaluating land and what makes one property worth more than another. Our job is to help you make an informed decision with the best data available. We are focused on these goals and want the opportunity to help you. We think between now and year end will present some excellent opportunities. Please let us know how Green Hill Land & Timber, LLC can be of assistance with your land and timber needs.