Tree Farms Are Becoming a Popular Investment

An area that is planted with trees for the purpose of producing timber is known as a tree farm. Tree farms are usually owned on a private basis and can refer not only to forests but to plantations and tree nurseries too. Both plantations and tree nurseries refer to places where trees are grown, for sale to commercial endeavours or retail markets.

Tree farms start with the planting of saplings, which are leaves that are either harvested or have been naturally dropped from trees. The investors then wait for these saplings to grow into trees. When the trees mature, they are harvested for wood and also for more saplings, which are then used to replace the trees that have been cut down, to grow a new generation of trees.

This process of regeneration can be repeated indefinitely so that a constant supply of trees is produced without the need for adding more land to the tree farm. This, in turn, serves to protect the environment as the area surrounding a tree farm can be conserved and maintained for its original purposes.

Those who invest in tree farms have the choice of the size and type of trees they plant. Some investors prefer to plant larger trees as these trees yield more timber per sapling while most investors in tree farms prefer planting smaller trees as the amount of wood or trunk as compared to the amount of leaves is less, and all the wood can more easily be harvested from the ground.

There are many different types of trees that can be planted in tree farms and the type of tree that an investor plants depends on the needs of the investor and the type of return that is desired.

One of the more popular trees used in tree farms is the melina tree (Gmelina Arborea). Melina has a high density and is used extensively for building materials and furniture. The wood has an off white appearance and this creamy colour enhances its demand for the packaging industry. The Melina is planted in Costa Rica, a perfectly suited environment for the species. It needs to be planted 10 degrees either side of the equator for it to flourish. Melina is a quick growing species and can reach 100 feet tall within 12 years and this is another reason for its popularity. In more temperate conditions a tree (oak for example) would require a much longer growing cycle before it would be suitable for harvest.

Melina is the wood of choice for pallets used in transportation. With consistent and rising demand, and with a ready-made market for this wood, it is easy to see why the Melina tree is a popular investment.

Another type of tree that can be planted in tree farms is the Teak tree Tectona Grandis. Teak is a tropical tree renowned for its grain quality that produces durable hardwood used extensively in furniture; house building, and yachts. Growing demand for teak wood, coupled with limited international supply, suggests that increases in teak prices should continue steadily. New Teak Forestry Plantations generally have a growing cycle between 20-25 years as the plantation is fully managed and use new practices to help with biological growth.

When investing in tree farms, an investor needs to carefully investigate and research the situation in order to determine which size and type of tree best suits their investing requirements.

Silvinvest highlights some fantastic investment opportunities that are not only Green but offer superb potential returns. We explain how to invest using Cash or an existing UK Personal Pension. We also offer ideas and ways to provide investment returns to support your child’s long term financial future.

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