Why Forestry as an investment?
As the market for investment has become more volatile due to the turbulence and uncertainty in the economy, many investors have been looking at different avenues of investment which has seen forestry as an investment sore in popularity in recent times.
The introduction of the new forestry scheme has seen the removal of farmer and non-farmer rates, with a uniform premium for every landowner for 15 years. It has become a better incentive for the investor due to the higher rates of premium and return than previously available in the old forestry scheme.
Forestry has favourable grants and premium available where your forest will appreciate in value annually tax free. These favourable grants and premiums ensure that there is no cost, apart from the initial land-based investment, safeguarding forestry as an investment is low entry.
Forestry as investment has been noted to have cheaper management costs than stock market investment, and also, forestry offers a vibrant market (i.e. sawmills or future potential in new markets such as Bioenergy) and favourable tax basis.
Forestry as an investment is also looked upon more favourably by investors not only due to the generous premium, grants and tax breaks but also due to the relative ease to sell on.
The sawmill’s demand for timber is not currently being matched by the thinning and clear fell of forests in the public and private sector. This in turn creates a high demand for timber in the market and is adequately matched by price.
Ireland’s climate (mild and frequent rainfall) is seen as one of the best environments in which Forestry can grow, ensuring that when managed professionally, forestry is a low risk, safe investment. As stock markets may fluctuate and dive, as seen in recent times, trees keep on growing giving a sound return on your investment through premiums and sale of timber at thinning and clear fell.