Logging Out Property

[westkill]

DH and I recently purchased 13 acres of land. We also own 8.5 acres nearby. We have been approached by a local logger who would be interested in logging out our property. This is something that we had already decided that we want done. Our dilemma is that the logger offered us a choice of either getting paid a set fee and to take 50% of what he will be paid by the mill. What should we do? Which would be more profitable? Any ideas?

Terry

[Chief Tutor]

First of all,

What has been offered to you is only the opening offer. I would recommend the following:


Since you had already talked about logging the property, there should be others in the area who are doing the same thing. Speak to the real estate agent you purchased the property through. I am sure they would know others who have been in this position and how they handled it.
Second, the size of the property is small in regard to logging parcels. Since a logging company is interested, there must be some added value to your parcel. Either you have some trees which are valuable ie...redwood or some very old growth trees which are more valuable than new growth trees.
If neither of those aspects apply, and since the size of the parcel is small, I would take a one time up-front payment and also integrate a penalty clause which stipulates how the property should be left after the are finished logging. This penalty must be large enough to make it in the best interests of the logging company to meet those quidelines or the cost to clean up the mess when they are done could end up being more costly than any income produced and the value of the land could be lessened due to the logging.
One more note, depending on your future use of the land, select cutting versus clear cutting would generate more income over the long term.Good Luck and remember that I am not in the logging business nor have I ever done a logging agreement. I just have a non interested third party knowledge from being on the outside of past logging agreements.

[westkill]

Thanks for the reply. After doing some checking, we have discovered that the logger is highly respected in the area and leaves the property in clean shape. Seeing as our property is on the side of a mountain, the trees that the logger is interested in is no where near where we plan on building our home nor are they visible from the road. DH will be there the entire time with the logger and the logger has agreed to work with DH in placement of the road. So we feel that this is the right choice for us.

Thanks,
Terry

[JohnHoward]

Terry, Glad you’ve done your home work. You can also ask the logger for past references and to view some of his job sites. I know loggers in our area will have past work sites that you can check out and visit with the land owner. Another option is to check with your State Forestry Agency. They generally have a good idea of the good loggers and those that are not at the top of the grade.