Forestry Investment – Structured Investment Vehicles
Due to the availability forestry investment options, many investors are now investing their hard earned cash in this industry. These investments bring more returns and pose fewer risks to the investors, unlike other unstable investments.The last fourteen years, stock investors have not only tried to maintain investments in the stock market, but they have also been facing huge losses for about four years. In contract to this, forestry investment has shown tremendous growth and profit for a long time now. If you are looking to invest in this industry, you need to factor in some important aspects so that your forestry investment flourishes.For this reason, this article will highlight some of these investment vehicles that make forestry investment option available to the investors.
Besides looking for a piece of forestry land, an investor must look for a company that he or she will commission so that it can grow, harvest and sell the types of trees that they will grow on his or her behalf.While this might look like a walk in the park, this investment technique requires many questions answered. For example, they have to know where to look for the land, the tree types to grow and who will look after the property once it is purchased.
Of course, there will be other things that need to be considered like the start-up capital for buying the land and tree, who will purchase the wood, the selling price of the wood harvested, and the risks associated with this industry.
The market for the wood you have planted should not worry you as there are so many companies that deal with manufacturing timber products which will be interested in buying your timber. It is important to know that some companies will approach you to plant trees for them and pay you a fixed price.The price you intend to charge for the wood that you will sell should be determined by your farms location, kind of tree species that you want to plant and the quality of timber you expect the trees to give you.Pre-negotiations of timber prices before you even begin harvesting is good since it helps you resolve any issues with regards to fluctuations in future prices.
Lastly, get ready to deal with natural disasters such as fire outbreaks if you have decided to invest your money into forestry.However, this often occurs rarely and if you have taken an insurance cover, then be rest assured that you will be compensated if this happens.