  High-quality rare-earth-ion (REI) doped materials are a prerequisite for many
applications such as quantum memories, ultra-high-resolution optical spectrum
analyzers and information processing. Compared to bulk materials, REI doped
powders offer low-cost fabrication and a greater range of accessible material
systems. Here we show that crystal properties, such as nuclear spin lifetime,
are strongly affected by mechanical treatment, and that spectral hole burning
can serve as a sensitive method to characterize the quality of REI doped
powders. We focus on the specific case of thulium doped Y$_2$Al$_5$O$_{12}$
(Tm:YAG). Different methods for obtaining the powders are compared and the
influence of annealing on the spectroscopic quality of powders is investigated
on a few examples. We conclude that annealing can reverse some detrimental
effects of powder fabrication and, in certain cases, the properties of the bulk
material can be reached. Our results may be applicable to other impurities and
other crystals, including color centers in nano-structured diamond.
