Forestry Investment – Structured Investment Vehicles
With forestry investment options, investors have put their hard earned money into this industry. This is because the industry comes with fewer challenges and excellent performance as compared to other unpredictable markets. For the last fourteen years, stock investors have faced several risks which include balancing investments in this market and not been able to make sustainable profits.However, forestry investments have advanced and have been registering good profits year after year.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.
Apart from buying a section of forestry land, an investor must also find a company that will plant, harvest and trade the kind of trees on their behalf. Even though this may sound simple, this investment strategy poses a lot of questions to investors.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.
Apart from these questions, there are other aspects that investors need to put into consideration like the capital, where to find the land to grow the trees, who will purchase the wood once it is ready for harvest, what rate will the investor sell the wood at and what hindrances the investor will face in this investment.
As an investor, you should not worry about who is going to purchase the timber harvested in your plantation as many timber manufacturing companies will be interested in buying wood from you. It is important to know that some companies will approach you to plant trees for them and pay you a fixed price.If you wish to enter into an agreement with these companies, the rate that you want to settle on with the company should be dependent on the type of trees that you want to plant for timber, the location of your plantation and the quality of wood you expect the trees will produce.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.
To conclude, you should prepare yourself to expect disasters such as fire outbreaks in case you are thinking of doing investing in forestry. Nevertheless, this seldom occurs and if it does, then the insurance company will compensate you in case you insured your forest investment against natural disasters.