Commercial forest for investment

[new hope]

Good afternoon,

 

Please bear with my slightly basic questions and please point me in the right direction of threads that cover my questions - I know how annoying it can be for forum regulars to go over the same questions again and again from 'newbies' lol !

 

So....I am involved with property and am looking to diversify my portfolio and purchase with cash a larch woodland. The tax advantages are clear but:

 

What equity can be released from commercial woodland? I appreciate that location, type of land, environment etc etc all play an important role in the yield a forest can provide - however, there must be some rough generally accepted guidelines from certain species covering certain sizes of woodland.

 

How many tonnes per acre of forest would you expect from larch that has been growing for 40 years and what actual value does it have and what is the process for selling it?

 

What is the accepted felling process....for example, is it OK to buy a woodland that has permissions to fell and then chop it all down in one go and re-stock or is this seen as aggressive and unsympathetic to the animals and biodiversity that has been created over the last 30/40/50 years while the wood matures and so you need to remove sections and re-stock as you go?

 

How long in weeks/months does it take to fell an acre of forest and then see a return from the wood? If selling to say a saw mill what invoice terms can be expected? 30/60 day etc?

 

What would be expected in terms of labour costs per acre or would it be best to have a contractor come and do the work for me?

 

I have got a lot more questions but don't want to flood my first post on here with just questions haha!

 

I'd very much appreciate any replies thanks!

[Yorkshireman]

firstly welcome to Arbtalk

 

the Search function on the head of your page is helpful ,,

 

be careful what you buy , there are many P&D out there that can wreck a crop.

 

As this is your own money I would suggest the answers are best learned when you find them yourself ...

 

there are Defra funded NFP organisations out there who can assist with some key info

 

Iain

[PhilBeech]

All very valid and well thought out questions. I would suggest you engage the services of a forestry consultant to give you the correct advise based on the latest information.

 

Iains points of pests and disease are very relevant at the moment. Good luck!

[Logrod]

For a general answer to some of your questions, you might try Practical Forestry for the Agent and Surveyor by Cyril Hart. Companies like UPM Tilhill publish indices of timber value, but actual value is very site specific. If you're buying somewhere with felling permissions already approved (or even woodland that is ready to fell) bear in mind that that will have been factored into the sales price.

My gut feel from some of your questions (time to fell, invoice terms etc) is that it's probably the wrong investment for you, in general lowish margins, high uncertainty (diseases, when can you actually get onto the land to fell etc) mean that there are probably easier ways to diversify your portfolio - have you considered guano?

[TimberCutterDartmoor]

publish indices of timber value, but actual value is very site specific.)

 

Very wise comment.

 

Larch will likely get a PHN on it sometime soon aswell.

[new hope]

Thanks for the replies people, plenty there for me to continue looking into.

 

As for the guano lol...i'm looking for diversifying my investments, short, medium and long term returns but would rather stay away from specialized/luxury lmao

 

Peace and Love

[Logrod]

Latest FIM investment bulletin:

 

http://darkroom.fimltd.co.uk/original/4b312849d8ae9452916b6ac4dcdc10bc:560d17f582424d149b1519bd637aaaa5/investment-bulletin-december-2013.pdf