Timber investor – Buying ready made or growing your own?

There are many choices open to the timber investor today. A choice of where to invest geographically as Latin America, Fiji, India, Australia, New Zealand, Germany and here in the UK all have established managed forestry plantations that are suitable for investing in timber.

There are also many advantages to buying some land, a bare field for example, and rather than a timber investment company growing timber on it, you become a timber investor by planting it up yourself. Your reasons for investing in timber can also help determine if planting your own forest from scratch is the better option. Buying an existing timber plantation means you have far less choice of what kind of woodland crop you can harvest, and historically the timber investor has been offered a rather narrow choice of either fast growing softwood conifers like those typically offered in Scotland and Wales, or slower growing Americas hardwoods like teak, or walnut or oak as are available in more temperate European climates.

Tax advantages of being a timber investor

As a timber investor you have already decided that the tax advantages of investing in woodland are attractive to you so next you need to decide if it is worth developing some woodland from scratch on bare land. You are able to choose if you want to plant trees for timber or if you would rather have an orchard. You are able to choose the density of trees and the species of trees. Not only do you get to invest in your own timber by growing a woodland yourself, it gives you complete control over what it becomes, and it is also much cheaper than buying an already established woodland. The possibilities are seemingly endless when you have total control over your timber investment.

Should you choose to grow fast growing biomass you might try miscanthus or willow or you might prefer an orchard of fruit trees. Another option is growing a forest of nut trees, like black walnut, which is highly prized in the world of carpentry. Nut trees, of course, also yield nuts you can harvest and they are higher in protein than the equivalent area of land put over to beef farming. If you decide you would like to grow an orchard, you will be able to see them become fully developed and croppable in as little as one or two years. Not really the usual idea of a timber investor, having their own apple or pear orchard, but why not?

You may choose to use your land to grow trees for the purpose of using their timber for burning as a fuel source you may like to grow ash, oak, birch, hazel, wild cherry, sycamore or alder trees as these types grow best and produce the best results for this purpose.

Another reason you may choose to create your own forest is for sporting reasons. Certain game prefer certain types of trees and bushes. You could, for example, choose to grow a significant amount of heather, which could turn your land area into a small grouse moor. As grouse shoots can charge £1000 per day per gun, if you put on hospitality packages with bubbly and picnic hampers etc you can see that this type of investment could be very lucrative.

Armchair Timber Investor or wellies on type?

While purchasing an already established forest plantation does allow you to sell the timber right away without having to wait 10, 20 or even 50 years, the land will be much more expensive because it has all of those trees ready to be felled. It may seem like a major disadvantage to have to start from scratch and wait up to 50 years before you can even sell your timber, but it is much cheaper. It all comes down to what you are investing for. For example if a timber investor is in their 40's they will want a timber investment that will mature when they retire so a maximum of 25 years. Some timber investors purchase a plot of bare land and choose to grow their own oak or walnut forests, which take close to 50 years to become established, in order to pass it down to their children or grand children as a retirement plan.  At the end of the day you have to decide if you want it to be a hands-on investment where you get grubby in the fields or one where you just invest your money and are more of an armchair timber investor.