Forestry as a investment

Discussion in 'Forestry' started by max, Feb 22, 2017.

  1. max

    max Well-Known Member

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    Looking for a bit of advice for a friend.

    He's thinking about buying a 17 year old 50 acre piece of ground as a investment instead of housing to save the hassle of renting to people.

    What are the potential pitfalls or what would ye lads think of the idea. Neither of us no much about forestry.

    Just a bit of extra info he's working abroad and has no notion of coming back here farming and doesn't have a herd no although there would be about 40 acres on the home ground.
     
  2. Arthur

    Arthur Well-Known Member

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    Planted 17 years, has it been thinned, what type of timber is planted in it, is there any roadway through it ?
     
  3. muckymanor

    muckymanor Well-Known Member

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    Gotta look at the grants available on it too. Not many years left on it .- I think grants are only for 20 years. After that the only return on it will be the sale of the timber. As above it would be important to know what sort the timber is in it - type, amount and quality.

    Also another factor to consider is access for getting the timber out. You'd be surprised how much forestry was planted on land with little or no access for lorries or harvesting machines - just planted for the grant. You don't have to go too far to see a plantation like this - just outside my back door.
     
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  4. Tippcon

    Tippcon Well-Known Member

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    Ah your back door is a long way away for some of us in fairness :lol:
     
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  5. max

    max Well-Known Member

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    I sent him a link to this and sent him a message to join the forum but he's 4 hours ahead so was probably asleep and hasn't seen the message. He might be able to answer that tomorrow but however anything ye do ask will give him questions to ask the auctioneer as well.
     
  6. max

    max Well-Known Member

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    Might be a long way to Tipperary but my young lad could nearly hit his back door with the football at this stage
     
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  7. muckymanor

    muckymanor Well-Known Member

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    I can pick up max's WiFi and he mine :clap:
     
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  8. Mf240

    Mf240 Well-Known Member

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    http://www.forestryservices.ie/

    This site has plenty of info. These guys hang out in the mart building in Kilkenny and are sound enough. I called in one day in 2012 for a chat. (The Samaritans were engaged :blink::laugh:)
     
  9. max

    max Well-Known Member

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    Ah no, I can't get anything down here, sure I'm in the gate house into muckymanor estate.
     
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  10. Arthur

    Arthur Well-Known Member

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    He really needs to have a forester look at it to determine where it is headed in terms of yield and type of product, at 17 years it needs thinning very soon, assuming it's Sitka spruce that will yield a small return as it will be predominantly pulp wood and it will be a good few years before another thinning which would yield a better return as the larger thinnings would be more towards pallet and saw log, the next crop would be clearfell which for Sitka would be around 35 yrs.
     
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  11. Mike

    Mike Member

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    He would surely be much better off buying land and getting it planted himself.
     
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  12. max

    max Well-Known Member

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    I mentioned that option to him, neither of us I'd know the ins or outs of it though he's only looking at the moment so all ideas and advice will be appreciated.
     
  13. muckymanor

    muckymanor Well-Known Member

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    He would be guaranteed a minimum return anyway.
     
  14. max

    max Well-Known Member

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    That's what I was wondering, even without a herd no could he claim entitlements or whatever for the next 20 years. It I'd be a steady return he'd be looking for.
     
  15. muckymanor

    muckymanor Well-Known Member

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    Yes. On new forestry. He would get a grant to establish and maintain it which would cover 100% of the cost. Then every year he would get paid by the acre.
     
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  16. max

    max Well-Known Member

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    Much per acre or is there different variants? And is that for the 20 years?
     
  17. Seedsower

    Seedsower Well-Known Member

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    Afaik a crop like that may not be valuable.
    There are only a few years premium left.
    First thinnings may cost more to harvest than their value depending on many factors.
    There is an obligation to plant again without grants after clearfell unless it changed recently.
    It's likely worth less than bare land
     
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  18. Arthur

    Arthur Well-Known Member

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    I think it has been reduced to 15 years now.
     
  19. Arthur

    Arthur Well-Known Member

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    That is the main reason he needs a forester to look at it, to assess it's potential and value, he might have missed 17 yrs premiums but he is also 17 yrs nearer to final crop.
     
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  20. muckymanor

    muckymanor Well-Known Member

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    It varies on the type of tree planted. It is also a bit less when he doesn't have a herd number. But it's still quite a bit.

    Forestry suitable land could be bought at ~€3000/acre last year. That farm across the lake was up for sale last year and he wasn't gething the €3k/acre for it so he decided to plant it.
     
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  21. Mike

    Mike Member

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    This, and as the man doesnt even live in the country, I dont see why he would want to be getting involved in the timber business, especially when it could be many years before there is profitable timber out of that forestry.
    Buy bare land and get a good forestry company to plant and manage it and collect the payment for 15 years. He can then decide whether to keep it on or sell it off as the seller here is doing.
     
    Last edited: Feb 24, 2017
  22. humungus

    humungus Well-Known Member

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    they probably seen your number and didn,t answer:wink:, i bet the jehovas don,t call to you either
     
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  23. nashmach

    nashmach Moderator

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    Reading the press, isn't this the type of ground that the new Swedish investment fund are looking at buying that max's friend is interested in?
     
  24. Tippcon

    Tippcon Well-Known Member

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    Swedish is good, if the blonde one from Abba and Ulrika Jonsson are a measure of Swedishness :scratchhead:
     
  25. Mike

    Mike Member

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    Wasn't there a serious incident in Sweden recently?
     

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