A timberland is a form of investment that entails infusing your money into trees. This can either be through planted forests or natural forests. Most of the investors who own timberlands bank on the foreseeable biological growth of trees increase the value of their assets tremendously.
Today timberland provides an alternative investment portfolio to thousands of Americans who have decided to diversify their incomes. And this explains why we have millions of plantations in the United States.
Below are the benefits of owning timberland as an alternative portfolio of investment.
The low volatility of timber prices
Due to unpredictable economic development, many investors in the United States have opted to buy timberland as an alternative investment portfolio. In most cases, timber prices have higher stability than most stocks that are in the market.
With a growing population with a high affinity for quality timber furniture, timber prices are continuously rising daily. Owning timberland will allow you to enjoy the investment cycles that have steady prices and are predictable. Even when the prices of most products have gone down, the prices of timber are known to stand. The stability of the price point for timberland is a really strong factor while making the decision of investing in one. Additionally, timberlands are known for their high returns and relatively low risks. Besides serving as a good option, investing in timberland properties can also provide a great area for relaxation and/or activities that can be done in nature.
The rapid growth of investment
Due to the increase in the number of individual investors joining this sector, timber prices are set to increase rapidly. More buyers are competing for the available land, and this is one factor that is pushing the prices of timber to a high level.
In the US, the number of institutions investing in timberland is increasing at a high rate. This shows a greater possibility of timber investment becoming of the best business portfolios to venture into. With growing technology, there is a high affinity for classic furniture among different individuals, an indication that timber investment is expanding.
This shows that you do not have to wait for a long period to gain potential customers. If the prices and demand are high, you will likely enjoy rapid growth in your timberland investment.
With different species in your timberland that mature at different periods, you will likely enjoy flexible harvesting, especially during summertime. This means that you do not have to wait for all trees to mature. Sometimes there might be a sudden increase in the prices of particular species, and you can take advantage of these opportunities to make good money out of it.
In some species, their life cycle does not dictate that they should be harvested at a particular time. This makes sure that you do not run out of finances to support your investment.
Return and cash yields
In most cases, the total return of your investment on timberland is enhanced by the biological growth of similar trees. You may find that your timberland population has increased by 5% within a year, depending on the species of the plants that you have grown.
Different trees mature at different periods. As you wait for the others to mature or a good number of them to sell them together, seeds may fall and get dispersed to different places in your timberland. If the climate of the place is favorable, the seeds are likely to burst into new growths that increase the number of trees you have.
Also, you can use the additional trees for personal use or decide to cut them off if the undergrowth is too high. Ensure that there is a sufficient supply of sunlight in your timberland, which will lead to quality produce.
As you work towards achieving your goals or the set of standards you have put for your new timberland, you will be promoting the conservation of the forest ecosystems. Timberlands sometimes can be efficient windbreakers that may increase the levels of rainfall in an area. If you won an extensive piece of timber, it feels proud to know that you play a big role in conserving the environment.
Too, timberlands tend to be sources of rivers, especially if they are located in mountainous regions. You might be lucky to have a freshwater spring in your timberland that you can utilize for your consumption. Owning timberland also gives your family more security as some of your kids won’t have to struggle to look for land to settle.
An additional source of investment
In most cases, industries that deal with furniture or agriculture-related operations tend to do their research on timberlands. They aim to understand which species are fitted in certain regions. You might be lucky to get these opportunities as a timberland owner. Your proximity to these institutions plays a big role.
It’s unlikely that they will skip your timberland that has specifications that best suit them. Also, the accessibility of your timberland plays a significant role in ensuring that it’s selected for these opportunities. Construct clear paths that will allow entry into your timberland.