If you’re a land owner or looking to invest in timberland, you may have heard of the term HBU or Higher-and-Better Use. In simple terms, HBU refers to the value of a property beyond just growing timber. Potential for development, conservation, or recreation can increase value beyond traditional timberland prices. Explore it’s meaning, impact on timberland owners, and importance for investors in this post.
HBU Defined
HBU includes the value of land that can be used for alternative purposes beyond timber production. CREW professionals can help you determine the value derived from the potential to subdivide the land and sell off portions for development, leasing recreational activities, leasing hunting rights, or setting up conservation easements. These alternative uses increase the property’s worth and make it more attractive to investors.
Implications for Timberland Owners
Understanding Higher and Better Use is critical for timberland owners who want to unlock the full potential of their property. Owning a piece of land with significant HBU value could lead to more significant profits, particularly in areas where growth and development are rising. Engaging with forestland management and conservation experts, like CREW, can help timberland owners tap into their property’s HBU value and yield the best possible returns.
Conservation
HBU can also represent critical conservation opportunities, including preserving rare plant and animal habitats, wetlands, and other natural areas. Landowners can partner with nonprofit organizations and government agencies to protect sensitive ecological areas or save historic sites. Sometimes, these efforts may qualify for tax incentives that help offset costs and add to the property’s overall value.
HBU and Recreation
Timberlands with HBU value can also serve as a recreational hub for hunting, fishing, hiking, and camping activities. These activities can be leased out to independent groups or through commercial agreements with interested parties. Some timberland owners may consider setting up their recreational business to take advantage of the property’s natural beauty, enhance its value, and create a steady revenue stream.
HBU for Investors
Finally, investors can find immense value in timberland properties with HBU potential. Identify land with high HBU value through due diligence and market analysis to unlock potential and boost profits. The team at CREW Land Co are the go-to experts!
Higher-and-Better Use refers to the value of a property beyond traditional timberland values. HBU encompasses development, conservation, or recreation potential, leading to higher prices and impacting timberland owners and investors. Higher and Better Use knowledge helps timberland owners maximize property potential, and investors make informed decisions on high-potential properties. Whether you’re a timberland owner, outdoors enthusiast, or an investor, HBU is a critical concept to understand in today’s real estate and investment landscape. Contact us today!