Price for Poor land - Competing with forestry companies?

abnormalnorman

Hi.

There's 30 acres of land near me for sale, which would be great benefit to my farm, linking up 2 blocks of land i already own.

The land is very poor / boggy. Good access off road. lots of forestry nearby.


The thing is, based on fairly good land that has sold near me for 4-5k per acre, I think this land only worth about 2- 2.5k per acre. But auctioneer is saying that forestry companies are paying at least 3-3.5k per acre, so my offer would want to be at least more than that.

My query is, how can I find out if he's right?

How do I know a forestry company will pay 3-3.5k per acre for it, or if they are interested in it all?

bogman_bass

abnormalnorman wrote: »

Hi.

There's 30 acres of land near me for sale, which would be great benefit to my farm, linking up 2 blocks of land i already own.

The land is very poor / boggy. Good access off road. lots of forestry nearby.


The thing is, based on fairly good land that has sold near me for 4-5k per acre, I think this land only worth about 2- 2.5k per acre. But auctioneer is saying that forestry companies are paying at least 3-3.5k per acre, so my offer would want to be at least more than that.

My query is, how can I find out if he's right?

How do I know a forestry company will pay 3-3.5k per acre for it, or if they are interested in it all?

Would it be worth leaving them but it and offer to buy just enough back to join the farm up?

Bass Reeves

Highly unlikely any purchaser will sell you any. Even if they did it may contain a very wet spot that would make it useless as access between both farms.
I consider the price of 3-3.5 to be on the lowest side of forestry price. Indicating it may be marginal for forrestry. However it would indicate a base price of near enough that.

abnormalnorman

Bass Reeves wrote: »

I consider the price of 3-3.5 to be on the lowest side of forestry price. Indicating it may be marginal for forrestry. However it would indicate a base price of near enough that.

How do i know - forestry company might not be interested at all?

Butcher Boy

abnormalnorman wrote: »

How do i know - forestry company might not be interested at all?

forestry not buying bad land anymore,

kk.man

abnormalnorman wrote: »

How do i know - forestry company might not be interested at all?

You won't know that for sure with a auctioneer by private treaty.
Think of it this way, you wouldn't build a decent slatted shed for what you would likely buy it for. You often have only one chance of buying land if you are lucky.

Apiarist

abnormalnorman wrote: »

How do I know a forestry company will pay 3-3.5k per acre for it, or if they are interested in it all?

I don't understand. Is this some kind of a blind auction where you have to bid once and have no chance to see what other bids are?

Land auctions I've seen where open auctions in hotel conference rooms with people bidding openly. Or are you trying to buy the land to prevent it going to the auction?

abnormalnorman

Butcher Boy wrote: »

forestry not buying bad land anymore,

whats your definition of bad land?

tabby aspreme

Get the Teagasc forestry advisor to look at it, and see if it is suitable for forestry, say that you are thinking of buying it to plant, that will give you an indication of whether the forestry companies will be interested in buying it or not.

abnormalnorman

tabby aspreme wrote: »

Get the Teagasc forestry advisor to look at it, and see if it is suitable for forestry, say that you are thinking of buying it to plant, that will give you an indication of whether the forestry companies will be interested in buying it or not.

thanks . would he need to ask the land owner before looking at it? and would he charge for that?

Butcher Boy

abnormalnorman wrote: »

whats your definition of bad land?

bog or wet land .

Anto_Meath

Put a bid on it of about €3k an acre and see what happens. If there is a forestry company interested then let them bid and you can go again. If you insult the vendor by going to low then they might not sell to you at any money. You will find the auctioneer has told them what he would expect for this land and now this figure is in their head they wouldn't settle for much less unless it is a forced bank sale and in that situation you would be as well off having nothing to do with it.

Apiarist

tabby aspreme wrote: »

Get the Teagasc forestry advisor to look at it, and see if it is suitable for forestry,.....

And if the answer is positive, that would surely indicate to the current owner that there is an interest in the land for planting trees. I wonder how that would affect the price? :cool:

I says

Tis around 4-4500 an acre those eco warriors will pay for suitable land if they have work to do on it they might bother buying it.
Bid the auctioneer what he asked and see what happens

tabby aspreme

abnormalnorman wrote: »

thanks . would he need to ask the land owner before looking at it? and would he charge for that?

Forestry advice is free, I don't think the owner would have a problem with a perspective buyer walking the land with an advisor, the owner needn't know it's a forestry advisor, just ask the auctioneer is it ok to walk the land, if your joining it it shouldn't be a problem

tabby aspreme

victor8600 wrote: »

And if the answer is positive, that would surely indicate to the current owner that there is an interest in the land for planting trees. I wonder how that would affect the price? :cool:

I doubt the OP will tell the current owner if the advice he gets is, that it is suitable for forestry, why would he, but it will give him an idea if a forestry company might bid on it

abnormalnorman

I says wrote: »

Bid the auctioneer what he asked and see what happens

no set price from the auctioneer - only "make an offer on it, and we'll see how it goes" !

Bass Reeves

Like Butcher Boy says not all land suitable for forestry. If it is marginal any good forestry advisor will be able to tell you straight away. 30 acres is marginal for forestry as a commercial area unless you have similar sites in the region. Auctioneer seem to think it marginal as well from the way he priced it. I say evendor may have a price of 100K in his head.

I get the advice from a forestry advisor first there may be a advisor from a commercial company near you as well. You seem to think 60-70K is near enough the value. You can bid that and see what happens anyway. I do not think you will insult anyone as it only 30-40K below the asking price.

tabby aspreme

30 acres, approximately 12 hectares, would be eligible for 137000, in planting, fencing and forestry premium under GPC 3 diverse conifer, and around 20000 more for GPC 8 alder and birch.

abnormalnorman

tabby aspreme wrote: »

30 acres, approximately 12 hectares, would be eligible for 137000, in planting, fencing and forestry premium under GPC 3 diverse conifer, and around 20000 more for GPC 8 alder and birch.

137000 after how many years?

tabby aspreme

abnormalnorman wrote: »

137000 after how many years?

Around 40000 for initial planting and fencing the first year, and the rest spread out over 15 years

orchard farm

This is the main issue with leitrim farmers,cant afford to compete with forestry when neighbouring farm go for sale

Bass Reeves

tabby aspreme wrote: »

Around 40000 for initial planting and fencing the first year, and the rest spread out over 15 years

It may not be suitable for GPC 3 diverse Conifer. You may have to go for 10% diverse or Sika Spruce/Lodgepole pine which is 5600-6500/year for 15 years. No money to be made out of planting/fencing grants.

Now it is tax free but you give an undertaking to replant after clearfell. You can take it there will be 30-50 years between crops and while there is a little money out of thinning's it remains marginal over costs on smaller and poorer growth sites. ANC is over 1K/ year and a BPS at the average rate is over 3K. If there is BPS on it already I think as a farmer you may be able to draw that for a while with forestry grant.
If you pay 110K for it what is that money worth Over 15 years interest at 4.5% interest is about 38K. Over 15 years repayments are 9900/year approx.

Sheep breeder

tabby aspreme wrote: »

30 acres, approximately 12 hectares, would be eligible for 137000, in planting, fencing and forestry premium under GPC 3 diverse conifer, and around 20000 more for GPC 8 alder and birch.

Would have to get the land approved for forestry first, the auctioneer might have nobody else on the hook. Get a friend to ring up and ask about the land and how much interest in the land and what would it take to buy and state not local.

tabby aspreme

Bass Reeves wrote: »

It may not be suitable for GPC 3 diverse Conifer. You may have to go for 10% diverse or Sika Spruce/Lodgepole pine which is 5600-6500/year for 15 years. No money to be made out of planting/fencing grants.

Now it is tax free but you give an undertaking to replant after clearfell. You can take it there will be 30-50 years between crops and while there is a little money out of thinning's it remains marginal over costs on smaller and poorer growth sites. ANC is over 1K/ year and a BPS at the average rate is over 3K. If there is BPS on it already I think as a farmer you may be able to draw that for a while with forestry grant.
If you pay 110K for it what is that money worth Over 15 years interest at 4.5% interest is about 38K. Over 15 years repayments are 9900/year approx.

GPC 3 is Sitka / Lodge pole and 10% mix, if it didn't need much drainage just mounding or ripping, there is plenty of money in planting yourself

Donald Trump

I reckon even 30 acres stuck on it's own would still be a pain in the hole for serious forestry operations. Plenty of plots that size appear to sit on the market for years.


They can plant it and get X amount in grants up front but don't forget that planting is a one-way street.

Point is that that the auctioneers numbers might not be realistic to attract the forestry lads

Good loser

If you're interested get a bid in at a reasonably low level - say €60,000 and take it from there.
The auctioneer should inform you of higher bids as they come.


A quick check with the local Dept forestry inspector should inform you if the land was suitable for planting i.e. likely to get accepted for grant aid.

Robson99

I take it that if the 30 acres was fragmented the the forestry would have no interest in 3 separate 10 acre plots...just asking.. I know it doesn't apply in this case

Bass Reeves

Robson99 wrote: »

I take it that if the 30 acres was fragmented the the forestry would have no interest in 3 separate 10 acre plots...just asking.. I know it doesn't apply in this case

Plots of that size are not really attractive for forestry. Getting forestry machinery on and off sites cost money and time. As well having enough timber to get an adequate price is another factor. Friend of mine had a 20 acre plot and he clear felled it at 25 years. He never thinned or did anything with the plot. I have to confirm the figures with him but I think he was hoping to clear 7-8K/acre after harvesting and replanting costs.

390kid

Robson99 wrote: »

I take it that if the 30 acres was fragmented the the forestry would have no interest in 3 separate 10 acre plots...just asking.. I know it doesn't apply in this case

No if they were to buy it I think they prefer over 20

390kid

The forestry might not be interested in it and you could get it at a reasonable price if the seller or auctioneer was willing. They’ve stopped buying land for planting around here as they can’t get planning through for them

Donegalforever

victor8600 wrote: »

I don't understand. Is this some kind of a blind auction where you have to bid once and have no chance to see what other bids are?

Land auctions I've seen where open auctions in hotel conference rooms with people bidding openly. Or are you trying to buy the land to prevent it going to the auction?

Perhaps the land is not being auctioned, but instead being sold by Private Treaty.
Unfortunately at least some Auctioneers are not trustworthy......they pretend that they have high offers in order to bluff those genuinely interested.

abnormalnorman

Donegalforever wrote: »

Perhaps the land is not being auctioned, but instead being sold by Private Treaty..

correct!

kk.man

abnormalnorman wrote: »

correct!

But how do you tell????....You cant prove anything.

abnormalnorman

kk.man wrote: »

But how do you tell????....You cant prove anything.

Sorry i dont understand that comment? How do you tell what?

The land is for sale by private treaty.

Apiarist

kk.man wrote: »

But how do you tell????....You cant prove anything.

Exactly. You have to trust the auctioneer in that case. Or bid low and hope nobody else is interested.