Good Forestry Investments
By David Garner – Managing Partner, David Garner Consulting
Forestry investments are forestry investment right? well no actually. As it happens there are many different variables to take into account when sizing up a potential forestry investment, as there are with anyproperty investment, stock investment or any other type of investment for that matter.
Firstly you can opt for on-shore or off-shore, and for the most part off-shore forestry investments make for a more profitable investment at present. UK Forestry returns have dipped to 7% for 2008, whilst global returns for forestry investment have hovered around 15%.
There are also many different types of timber to choose from, Teak and Argawood in North America, Paulowina in Central America, the choices are reltively endless and in my opinion one should choose a timber product that has a relatively quick yield. I choose to invest in Panama with a yield every 5 years, so I know i’m going to see a timely return on my invested capital.
The next decision is the structure of the investment vehicle and personally I am relatively allergic to risk, so the project I chose to add to my portfolio had already negotiated the future sale of my timber for a fixed price for the next twenty years ao not only do I know I have a buyer, but based on the size of the plot and number of trees I have, I also know roughly what income I will recieve. The sale contract is bank bonded and all harvesting and transportation costs have been lodged with an FSA regulated trustees in the UK.
Over the next twenty years I will average a tax efficeint return on my investment of 16% per annum and aside from natural disaster, most of the forward rsik has been eliminated. My chosen project is also SIPP compliant making the structure ideal for those investing funds from their SIPP pensions for future income.
For more information contact David Garner at firstname.lastname@example.org