Show me the timber!
Sep. 27th, 2007 by Al 
Many of you guys know the precious timber resources men used for paper, housing, making fire, etc etc.So you too know the profits coming from a timber market.When one got a parcel of timber land, one not own only the trees but the potential of the land beneath.
It’s double return for while one wait for the trees to harvest, the land value too grow with time. The thing about timber investment is like land is a long term play and one will not probably see returns for the next 10 or 20 years.Given the long time frame, the value of the land may increase more than the returns of the timber harvest.
There are 4 options that you can take part in investing timber directly or indirectly.
Share option
You can buy shares into a timber company whether it publicly or privately but the downside is you cannot own the land .You cannot profit from any land appreciation as timber companies are valued for cash flow not land worth.
Buying Trees
You can buy trees from tree farm.The farm management take care of the planting and sell the trees on your behalf but you don’t own the land.How they know which trees are yours
is a tricky proccess I’m trying to figure out.This is the most simple way of investing in timber but also the riskiest.
Private Forestry Trust
Buying into a forestry trust is the third option.By buying shares into this trust, you get the advantage of professional management and land appreciation.This is a much better deal and more so if you decide to build houses on the land for investement.
DIY timberland
The last option are those with both time and money to develop their own timber plantation. You need the know how of timber growing and management but the payoff
is the greatest in doing yourself or you could tiedup with a reliable partner.
Please make sure that whatever timber investment you decide to engage in it’s a sustainable development.Happy planting!
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