Should I Invest

[sjc1987]

Hi All,

I am very new to forestry but am keen to learn. 

A local forestry block came up for sale recently, 1000 acres of tress and it's advertised for £755,000. 

Approximately 250 acres are ready to be harvested and the remaining 750 acres will be ready in 10 years. 

The trees which are ready to be harvested are Lodgepole Pine, the rest are Sitka Spruce.

Obviously I would need a huge loan to purchase the forest and equipment but i'm fairly sure there is money to be made. 

I'd love to hear the views of some experienced members. 

Thanks

 

[s o c]

Sounds cheap. 

There Must be a catch?

[MattyF]

You would be better off putting it out to contractors and paying them a tonnage than investing in the equipment would be my view .. a decent second hand harvester will cost you between 200,000 30,000 then you need a forwarder then the running costs and wages for the machines ... you would cut your 250 acres then have the machines sitting up for ten years before the next block is ready.

 

 

[sjc1987]

Thanks for the response folks. 

It does sound cheap, I don't think there is a catch other than the rural location, which is only 5 minutes from my door so very handy. 

Matty, do you think I could still make money after paying contractors? The only reason I thought about doing it myself was to keep costs down although I didn't realize a second hand harvester would be so expensive. Would a harvesting head on a digger not suffice? 

What sort of price would I be getting for a tonne of lodgepole pine at the minute? 

Thanks

[spuddog0507]

1000 acres is a big area with a lot of trees approx 1.2 million trees so thats roughly 63p per tree it would cost more than that to plant it today, take the timber off make your self a few million buy an island in the sun, and you still have the land as an investment sell the land £1000 per acre  and your on a winner, you have either read the figuar wrong or there is a very big catch with it or some one is taking the piss. 

[MattyF]

You would be looking at over 60 k for a decent head and digger I would of thought ... price of timber is on the up .. I know as we can’t get any !! And we usually buy in 300 tonne a year so if timber is fetching stupid money you can’t loose .. I’ve heard of a stand fetching £60 a tonne standing locally that is stupid ! I’m not sure what lads are charging per tonne to harvest but they all have machines they need to pay for and work, sadly they are the link in the chain that’s not reaping the current timber price boom speaking to them or they are keeping there cards to there chests .. if they were doing it for £30 per tonne road side last year for Sitka I seriously doubt they are charging any more than £20 a tonne to harvest ,so even if you only get £50 a tonne road side for it your doubling your money..

where in the country are you ?? Pm me if you don’t want to say ...I know a couple of big outfits that harvest and I will admit I’m dealing in Arb more than forestry so my advice is limited... but could pass numbers on to you ...nothing worse than an expert that has no idea !!

If you can afford to buy woodland at that cost you can not go wrong ! Price of timber is going up and land value is going up... wish I could.

 

[Stere]

Could you  also parcel up and resell as smaller lots  & make a load of money that way?

 

 

Edited July 25, 2018 by Stere

[Paul in the woods]

When I tried to buy a piece of woodland the offer price was set to encourage more than one bidder and it went to sealed bids. We won but agreed a price a fair bit more than the asking price. The sale didn't go through in the end as too many surprises cropped up during the sale.

 

Obviously if the price looks too cheap make sure you investigate the area in case there are hidden costs, access issues etc, etc. Can you talk to whoever manages it?

 

Don't forget to factor in replanting costs, and looking after the new trees, to your expenses.

[Rough Hewn]

Sporting rights?
Mineral rights?
Imminent bypass being built?
Squatted by travellers?
Diseased trees?
Or it's in a bog?
[emoji12][emoji106]

[Lucan]

If it is the forest I think it is then I would say probably not.

 

The initial 250 acres of lodgepole (lot of windblown) is low value chipwood and probably high harvesting costs (wet, and long forwarding paths). Then you have the significant haulage distance to the nearest mill, probable extra investment in roads and costs of replanting all that area. When you factor all that in I would be very surprised if the lodgepole it didn't end up costing you.

 

So you may well not be repay any of the loan for 10 years until the spruce is large enough, and even then spruce in that region tends not to produce top quality logs.

 

If you have £800,000 in your pocket you don't want the tax man getting his hands on maybe, but not sure about the loan idea. Having said that only seen a few photos so might well be wrong.