Investing In US Property
The forests of north eastern USA are capable of producing some of the finest quality hardwood timber in the world. Naturally biodiverse and resilient, US forests are truly renewable and well suited to intensive use. As deforestation of tropical forests continues, and remaining public timber reserves are protected, properly managed and privately held timberland will be increasingly important in providing timber resources to the growing world population.
Financial returns from US timberland investment are historically comparable or better than other property investments, and real returns from 5% - 8% are generally achieved. Returns are driven by the rate of appreciation of the asset, which gains in value by physical growth of the trees, but more importantly from managing and channeling that growth into higher value species of trees and products. In addition, historically, timber prices have appreciated well ahead of inflation, and as available supplies of timber continue to diminish worldwide, returns should be maintained or may even increase.
Timberland is a long term investment based on the physical growth of trees. It is characteristically low risk, offers a hedge against inflation, and provides diversification potential to investment portfolios. Although generally perceived to be illiquid, this is related to the maturity of the timber, liquidity increasing as the forest matures. The investment is characterised by appreciation of the asset value as the timber grows, followed by realisation of cash yield as the timber is harvested.
An investment in American Timberland also offers the following benefits:
- Improving $/£ exchange rate
- Many of the tax advantages gained from purchase of UK forestry
- Recreation, nature conservation, fishing, hunting and skiing opportunities
- Development potential: planning permission for building residences is easily obtained in most cases
- Sustainable Resource: Naturally diverse and well suited to forest management practices.
Fountains Forestry can provide you with detailed information on Timberland Investment as well as guidance on US taxation and other land issues. Together with our US subsidiary, Fountains Real Estate Inc we can provide the investor access to quality timberland properties and help the buyer build a clear understanding of the investment.
Details of our North American operations can be found at Fountains America. To see a list of current properties for sale in the USA, as well as a comprehensive range of US forestry acquisition services, please visit: www.fountainsland.com
Call: 01295 753233
for forest and land management, acquisition and brokerage services and environmental consultancy.
