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5 Things You Need to Know About Investing in Timber


When it comes to investment, you may probably not think of investing in trees since it’s quite an unusual option for most people. However, do you know that a lot of the world’s most affluent people invest in timber? Here are the five things you need to know about investing in timber.
1. Timber is a steady investment.
One advantage for investors who are investing in timber is that they can see their investment physically, visit it whenever they want, and get the picture of how they can profit from their land. It’s entirely different from investing in bonds or stocks, where investors only get a piece of paper and believe that a legitimate company is behind it.
1. It’s easy to invest in timber.
Investing in timber is a straightforward transaction. When you invest in timber, you buy land. All you must do is have the money, sign the paperwork and the ownership is yours. If you’re not investing directly, you can also explore ways to invest in timber with indirect ownership such as REIT or Real Estate Investment Trust. REITs are trusts investing in real estate. REITs that are timber-focused will allow you to earn dividends without the need to purchase, manage, or finance the timber investment.
3. Land is inherently valuable.
The intrinsic value of land makes investing in timber one of the investors’ great options. For instance, land with older trees will give you earnings coming from harvesting. With the younger trees, you can get your income from granting licenses or authorisations to hunters and fishers.
4. It’s laidback.
When investing in timber, you don’t need to do rigid monitoring or maintenance. This investment will sooner or later pay off, whether you have the land for lease, or sell the trees. Also, if a reforestation development is in place, you can pass this investment to your children and grandkids.
5. Timber is an inflation hedge.
Timber has exhibited to be an effective inflation hedge, especially the unforeseen inflation. A report by J P Morgan Investment Analytics & Consulting revealed that timberland highly correlates with inflation, thus it becomes a good investment for preserving your capital.





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