Market Perspective

Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 5

Posted by on Aug 30, 2012 in Ned Massie, Perspective | 0 comments

A Pouting Shack On a beautiful day, there is no better place to be than the woods.  Anytime I have been having a really lousy day, if I could go for a walk in some timberland I always came out with having had an attitude adjustment. Early in my career, one of my clients told me that he was looking to buy a tract for his “pouting shack”.  Not sure what he meant, I asked some questions and learned that what he wanted was a piece of land where he could go and pout the next time he had a disagreement with his wife, a bad day at the office, or just needed some peace and quiet. Imagine the joy of two for one…an attitude adjustment and watching your investment grow.  There are no other investments that offer that combination. We hope that the information we are sharing will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company, we love to help our clients look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 4

Posted by on Aug 21, 2012 in Ned Massie, Perspective | 0 comments

Maintenance Those of us who have owned rental houses as an investment recognize that invariably the landlord has to deal with leaky roofs and stopped up plumbing.  It seemed to me that the plumbing only got stopped up in the evening, weekends, or on holidays when my whole family was in town.  I celebrated with my wife when I sold the last of our five rental houses. One of the benefits of a timber land investment is that when it rains, the roof doesn’t leak.  Additionally, the plumbing never stops up on an evening, a weekend, or during a holiday.  One always has to manage an investment, but with timberland the maintenance is nominal. But part of the management is walking over your timberland.  Mix in a pretty day for your field trip, and what a satisfying occasion.  You never know what wonderful experience you will have when you are walking in the woods. We hope that the information we are sharing will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company we love helping our clients look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 3

Posted by on Aug 17, 2012 in Ned Massie, Perspective | 0 comments

Trees Grow Every Year Every year trees grow larger.  The weather during a year will influence the amount of growth.  As a timberland investor, that means that you own more wood fiber this year than you did last year on the exact same date.  That increase in wood fiber means that your timberland has increased in value.  This is in addition to any increase that you may realize in the land value. A well managed Loblolly pine stand has an average 4-6% growth each year.  Hardwood stands grow at a lesser rate.  The growth is geometric in regards to fiber production.  The well managed pine stand starts becoming harvestable at 15 to 20 years of age, however the normal growth cycle is 30-35 years.  The normal progression of growth is seedlings to pulpwood to chip-n-saw to sawtimber as the final product. As the demands for fiber and lumber change, we are seeing changes in the pricing which affect the length of cutting cycles in some areas.  Being aware of these changes can help maximize the return on a timberland investment. The demand for wood fiber in some areas is outpacing the available supply for those areas.  Other areas the supply is keeping up with demand, but demand will continue to increase.  This should give you a great return on your timberland investment.  Also, historically, timber prices have outpaced inflation by 1-2%. We hope that the information we are sharing will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company we love to help our clients look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 2

Posted by on Aug 9, 2012 in Ned Massie, Perspective | 0 comments

Demand for Wood Fiber Historically, we Americans consume a vast amount of wood fiber.  The demand is increasing both in the U.S. and abroad.  Growth is slightly more than demand presently, but may fall below future demand. There is increased pressure on available wood supply due to the increased Federal and state restrictions on timber harvesting on both private and public lands.  President Clinton took most of the timberland in the northwestern part of the United States out of production over concern about the spotted owl.  The argument used by environmentalists was that the spotted owl was being killed by the timber being harvested in the northwest. Today we know that the brown owl is killing the spotted owl.  But nobody has bothered to open up production in the northwest timberland.  So timberland in the northwest just simply grows and then forest fires burn it down.  Not good management of a valuable asset. Nevertheless, the demand for wood fiber continues to increase.  The fact that we will have more demand than available supply means that prices, historically, move upwards.  Like any other commodity, timber prices move up and down with the overall economy responding to short term variations in demand versus supply. However, the overall long-term bias in demand and therefore price is up because our available timber production is less than our long-term average demand for wood fiber.  Buying in the trough of a cycle such as today and holding for the long-term peak is a way of maximizing your return on a timberland investment. We hope that the information we share over the next 12 weeks will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company we love to help our clients look...

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Twelve Reasons to Buy Virginia Timberland as an Investment – Reason Number 1

Posted by on Aug 3, 2012 in Ned Massie, Perspective | 0 comments

Introduction – Stability in an Unstable World Even though 62% of Virginia is covered with timberland, we find that the vast majority of investors today have no knowledge of the benefits timberland provides as an investment.  Meanwhile, knowledgeable timberland buyers consider it to be a fantastic investment. Our intent with this series is to provide some insight into the benefits of timberland as an investment.  One significant benefit is its stability. Bankers tell me that in our current unstable world, many folks prefer to put their money in a bank account paying less than 0.5% interest per annum because they know they will not lose it.  So return of capital is obviously very important.  With inflation at 2.0% those that put their money in a bank and earn 0.5% per annum are losing 1.5% per annum. The stability of timberland is best illustrated by the fact that insurance companies buy a lot of timberland as a part of their investment portfolio.  They like timberland because its stability anchors the higher risk assets in their portfolio, thereby improving the overall performance of their total portfolio. But good portfolio management suggests that you do not want all of one type of asset in your portfolio (anyone recall Enron?).  We do believe that one key to accumulating wealth is having some of your funds invested in timberland. We hope that the information we share over the next 12 weeks will assist you in making a timberland investment.  We believe doing so will make you look brilliant over the next 10 years.  Call us, at Grant Massie Land Company we love to help our clients look...

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Twelve Reasons to Buy Land Now – Reason Number 12

Posted by on Jul 18, 2012 in Ned Massie, Perspective | 0 comments

Growth Management is an Oxymoron Growth management is synonymous with trying to squeeze a handful of Jello.  You can close your fist with the Jello in it, but it is going to ooze out someplace.  Similarly, the more the planners attempt to “manage growth”, the more their apparent success simply means that they are increasing sprawl. California, which in the early 1950’s was the origin of the concept of “Growth Management”, has failed miserably.  Not only does it have the worst traffic conditions and the greatest amount of sprawl, growth management has driven up the cost of housing to the point that the middle class is leaving California in droves.  By some reports I have read, California has had a net exodus of 1M residents over the last 5 to 10 years. As a result of losing its middle class, California perpetually has budget problems because the majority of their residents and voters are somehow on the public dole.  They keep their taxes low or non-existent and focus the taxes on the “wealthy”.  That has never been a good idea when tried before elsewhere. It is quite a contrast watching how Texas is attracting expatriates from California because Texas has a different philosophy.  Texas has enjoyed a fairly good economy during The Great Recession while California has had perpetual budget problems and the declines in services and infrastructure that result. Virginia needs to be paying attention to things such as cash proffers.  In some counties of Virginia, cash proffers are as high as $60,000 per residential unit.  As a result, apartment and starter home construction for Gen Y is non-existent and sprawl is returning as folks who cannot afford an extra $300,000 for a home hit the interstate and drive until they qualify. As a land investor, you can use this flawed concept of growth management to your benefit understanding that you can make a purchase which in the future will make you look brilliant. We believe that those investors who buy good tracts of land today will look exceptionally brilliant in five years.  Let us help you.  We enjoy making our clients look...

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