Forest as a financial investment
Would you like to invest ecologically? Forest as a financial investment offers relatively good security, but profits are often only realized after decades.
When the markets are turbulent, many investors look for alternative investment opportunities. In this context, forest as a financial investment is also an increasingly popular option. Renewable energies and ecological raw materials are in vogue, and land with existing trees is therefore quite desirable. But there are also other good reasons for this: By investing in green tangible assets, you make yourself independent of price slumps and recessions and generally secure a stable return. Nevertheless, there are numerous risks to consider.
Environmentally friendly investment: Earning money with wood
Those who choose trees as a financial investment benefit overall from a comparatively high degree of reliability. Although there are fluctuations in the trade with the raw material wood, these usually mean a rather low risk. You do not have to fear a reduction in value in the event of an acute drop in price, because if profits are low, it is advisable to postpone the sale. The trees will continue to grow and thus yield higher returns at a later date. However, this also has disadvantages: Because of the dependence on growth, trees as a financial investment are not an investment that pays off quickly.
It's what grows on the property that counts - tree species grow at different rates.
When newly planted, a profit can be up to 20 years in coming.
Some tree species even take over 100 years to mature.
The size of the plot also plays a decisive role in profitability.
Forest as a financial investment: risks and hedging
Investors have the option to provide for the land themselves or to invest in different providers. If you are interested in forest as a financial investment, contact brokers or institutions in MT4 that specialize in forests and forest land. Investments are possible both in Germany and internationally, whereby the condition and the existence of the property are of great importance. Despite the high level of security, it is important to assess the risks and counteract dangers. For forests as a financial investment, natural disasters as well as damage caused by weather, unauthorized persons or animal pests must always be taken into account. If you want to secure future profits, you have to provide sufficient protection and take into account the costs of security and monitoring.
Forests are a complex ecosystem and require year-round care.
When buying, it is advisable to have experts check the condition of the soil.
Minimize hazards: Lands with sustainable management practices are preferable.
If trees are too uniform, there is a high risk of pests.
Recommended: Properties with PEFC or FSC certification.
