Buy a Forestry Block – Grow your own Investment!
Have you ever considered that money really can grow on trees?
When you buy a forestry block, you are not just buying a piece of land; you are making an investment with a very high rate of return indeed.
Purchasing land – or ‘land-banking’, as it is often described, is a highly valued activity in New Zealand, for one good reason: future value (hence the term ‘land-banking!). There is a substantial return rate to be found in the growth of forestry blocks: and for the savvy purchaser, there are some real dividends to be made in purchasing land with existing stands of young or mature trees already in place.
Buy a Forestry Block: Statistics don’t Lie
While New Zealand’s forestry industry may be small fry on a global scale, we do supply almost 9% of Asia Pacific’s forest products trade volume – with a value representation of nearly 20% of the total Asia Pacific market! This is a massive industry for New Zealand, accounting for around $5 billion annual gross income and providing work for nearly 20,000 people. Demand is always high for our quality wood products, and there is no sign of the market slacking off any time soon. The PF Olsen website has some very worthwhile reading for those who wish to learn more – click hereand scroll down to the ‘Log Market’ section for some great insights into our forestry industry and market.
How long will you have to wait?
Almost 90% of New Zealand’s forests are Radiata Pine. Radiata Pine is relatively fast growing in New Zealand, with our country producing the best results in the shortest time. The Radiata can be milled between 25-30 years after planting, with around 300 trees per hectare representing the optimal spacing for best growth. As most pruning and thinning should be undertaken in the first 12-15 years, the final 10-15 years are relatively hands-off, making for a perfect trouble-free retirement or nest egg scenario. For other species, you could be looking at Douglas fir, cypresses and eucalypts, all of which have a strong share in both the NZ export and domestic market.
Buy a forestry block: advantages
For those who had the foresight to plant their forestry blocks many years ago, it can be frustrating to sell the land that holds their long-awaited investment. Unfortunately, in some cases a move is necessary: and these blocks of pre-planted land do come up fairly regularly. The benefits of purchasing land with existing stands of planted forestry are self-explanatory. The hard work has been done: and, especially in the case of the trees being over 15 years old, there is no more effort required on your part. When it comes time to mill your trees, the process is usually handled in its entirety by the company of your choice, with little input from you. Simply keep an eye on the markets and ensure your timing is right!