by Courtney Llewellyn
When it comes to a farm’s acreage, not everything is tillable land. Many landowners also hold tracts of woodland of varying sizes. These woodlands can serve as natural buffers – or, with some expert consideration, can become sources of extra income through concentrated logging.
That expert consideration is key. Lindsey Purcell, an urban forestry specialist with Purdue University, recently discussed this topic with his presentation, “What’s My Tree Worth? An Introduction to Tree Appraisal.”
There is much more to tree appraisal than just how big a tree is. Purcell noted there are many components to consider when valuing the trees on your land, and the process of valuing them can be as simple or as complicated as your appraiser makes it.
In the U.S., George Stone, Ph.D., with the University of Massachusetts was the first to develop a formula for valuing trees in 1916. The first official publication, “The Guide for Plant Appraisal,” appeared in 1957. It is currently in its 10th edition. Purcell cautioned that the book is a reference and procedural guide and not a standard.
Purcell recommended a website, mytree.itreetools.org, as “a great tool for how to look at trees from a functional perspective,” which is what appraisers will do.
By definition, an appraisal is an unbiased estimate of the nature, quality, value or utility of an aspect of real estate (in this case, trees). It is based on the purpose and use of the tree as defined by the owner’s needs. An appraiser determines the best approach for each tree’s situation and then develops a well-supported estimated of defined value. Value is created by the expectation of future benefits – in this instance, the sale of the wood harvested.
What do appraisers look at when they’re called to investigate your trees? They will consider the site itself, observe the tree’s features (its size, height, trunk diameter at chest height – about 4.5 feet above ground – age, condition and health and if there’s any physical damage), take photographs of the tree and conduct off-site research. This research includes looking into what types of trees are in demand and what eventual uses their wood can be utilized for.
All this information gives appraisers a general idea of what a tree is worth. They then need to consider depreciation – the reduction in the value of an asset due to physical deterioration of its condition. This includes the tree’s structure, health and form. Appraisers will also consider functional limitations, like how the tree and the site work together. How difficult will it be to cut down and remove a tree? Are there any utility conflicts? Is it too close in proximity to a structure? They will also examine external limitations, which are things beyond the owner’s control, like ordinances, right of ways and even climate change.
“Depreciation is not negative,” Purcell stated. “It simply adds reality to different situations.”
The original appraisal minus any depreciation will give landowners the most accurate estimate of the value of their trees.
Appraisers use different approaches and have different opinions, which is why Purcell recommended using the “triad test.” Is the appraisal reasonable, defensible and consistent? “More than one opinion may be needed,” he said. “I have seen major differences in size, and I’ve even seen misidentified tree species.”
Purcell also noted that not every tree will be a money maker. “A tree can have little or no value,” he said, “but not a negative value.”
If you’re interested in possibly making extra income with the trees on your land, finding a competent appraiser should be your first step.
What do tree appraisers look for?
by Courtney Llewellyn