Is it worth it to buy land for forestry!

Carlowgirl

Hi
Not sure if this should be in investments section or here. I am looking for an investment. I am currently renting a house as I am away for work and don't know where I ll end up settling. I am not a farmer so do not have a herd number. A parcel of land nearby has come up suitable for forestry. It costs around 80,000 with a return of 4,000 a year for twenty years. Couple of questions.
A) How much would it cost me to get a herd number i.e. is it possible to get a couple of goats to put on the land
b) would these goats have to be tb tested etc and resul in high vet bills
c) What happens to the land after 20 years?
Would it cost a lot of money to return it to grass land or would it be worth anything?
Any help greatly appreciated

tony007

How much is it per acre?
Are you planting hardwood or softwood? You need good land to plant broadleaf trees.

tabby aspreme

If you plant land and receive the planting grant and yearly premiums and then decide to return the land to grass all grant and premium money must be repaid to the dept, take a look at the Teagasc website for some info

dalton 1

A flock number would be easier to obtain than a Heard Number. No Crush or yard required when applying for a Flock number. as i understand all you need is a sorting pen(portable will do) and a small shed to house a sick animal( garden shed would do)
No cost involved only the price of a stamp.

Carlowgirl

Thanks for all replies. basically from what I gather here. The land would be basically worth less after if it cannot be returned to it s original form. I suppose the whole idea is to grow more forests? Would the trees be able to be sold to a saw mills etc or is does it basically have to sit as a forest after the twenty years?

Massey10

Carlowgirl wrote: »

Thanks for all replies. basically from what I gather here. The land would be basically worth less after if it cannot be returned to it s original form. I suppose the whole idea is to grow more forests? Would the trees be able to be sold to a saw mills etc or is does it basically have to sit as a forest after the twenty years?

It would be 30 - 40 years before clearfell and you would have to replant after again

dalton 1

The trees remain your property for the duration of the 20 years and can be sold to saw mills once the 20 years are up(i believe 10k per acre at todays prices depending on the type timber). i believe the land can be planted in forestry again.

i am at the early stages of planting about 25 acres at the moment.
FYI- include insurance into your yearly expenditure for the forest.
Ensure the trees will grow on the land because if the do not the department will look for the premiums back ( one large forestry company tried to convince me to plant Conifers in bog land and a couple of other people who have planted have told me the water table is to high and they will not grow)

just be careful.

Carlowgirl

dalton 1 wrote: »

The trees remain your property for the duration of the 20 years and can be sold to saw mills once the 20 years are up(i believe 10k per acre at todays prices depending on the type timber). i believe the land can be planted in forestry again.

i am at the early stages of planting about 25 acres at the moment.
FYI- include insurance into your yearly expenditure for the forest.
Ensure the trees will grow on the land because if the do not the department will look for the premiums back ( one large forestry company tried to convince me to plant Conifers in bog land and a couple of other people who have planted have told me the water table is to high and they will not grow)

just be careful.

Thanks a million for your reply. So after the twenty years (that I would get the return for) would they be suitable for sale right away or would they need to grow for another ten years etc.. obviously I am clueless when it comes to trees:D

Big Davey

Why would the op want a flock number if he is not going to farm poultry ?
I know a man with a herd number no sheds, no crush just a few (15) cows in a field How does that work ?

tabby aspreme

Flock no is for sheep, to get a new flock/herd no you need handling facilities.

With conifers first thinning @ 18 years with further thinning 5-7 years later and clearfell @ 45-50yrs , then you have to replant. Many different options with broadleaves ,a nice one is continuous cover forestry, google it

dalton 1

I believe conifers will be mature in 30/ 35 years. I suppose it all depends on the quality of the land.

You should contact a forestry company to come out to the land and have a look. Most of them give a free consultation.

As I said earlier im am at the very early stages of planting land. So all of the above is open to correction.

paddyc310

Get advice from some indepentant forester as every foresters company will all want to sign you up for planting good luck paddy

Jack180570

paddyc310 wrote: »

Get advice from some indepentant forester as every foresters company will all want to sign you up for planting good luck paddy

And the independent foresters won't want to sign you up?!?!!!!?????

$kilkenny

have you got a picture of the land by any chance???
if your looking at planting land i wouldn't spend more than 4000 euro max per acre, if the land has rushes on it then its more that likely suited to sitka spruce.
if your not a farmer then you will get a premium for 15 years at about 180 euro a year per hectare, if you a young then this will suite you as the big money comes in around year 30, this is where alot of people go wrong, they allow the forester to plant pure rubbish on their land that will be worth very little.

anyway you will see a return of some sort at around year 15 with sitka, first thinnings stage, then every 4 years after that for the 2nd 3rd and 4th thinnings, after that and around year 30 again using sitka as an example you will get if the price is good a nice 10k or so per acre.

this is all rough....
were the benefit is after its clear-felled it can be replanted and passed onto the next generation.

reclaiming forested land is pointless.... honestly..... all this and more info can be provided by a forest manager and as for receiving a grant, if its worked that the forest manager gets the grant for doing the work then you wont see any of that which is what most people do these days anyway.
as for marketing your timber to be sold in years to come, again this is done by your forest manager... basically you sign a few forms and they do all the work and sub contract the planting, fencing etc... once its at around year 5 and growing healthy then you can relax a small bit and watch your good investment grow!! that's what i plan on doing when i can any way

Jack180570

dalton 1 wrote: »

The trees remain your property for the duration of the 20 years and can be sold to saw mills once the 20 years are up(i believe 10k per acre at todays prices depending on the type timber). i believe the land can be planted in forestry again.

i am at the early stages of planting about 25 acres at the moment.
FYI- include insurance into your yearly expenditure for the forest.
Ensure the trees will grow on the land because if the do not the department will look for the premiums back ( one large forestry company tried to convince me to plant Conifers in bog land and a couple of other people who have planted have told me the water table is to high and they will not grow)

just be careful.

Hi Dalton, the trees are your property from day one till they are clearfelled. Unless you have a very poor unstable site you will not be (nor should you want to) clearfelling them at year 20, more like as other contributors have said, 30-40.

Regarding the price of 10k/ac: this is the value of an acre of very good forestry ready for clearfell at the moment. An average acre would be worth somewhere between 5-7k/ac and an acre of poorly thinned forestry would be worth around 2k/ac. There is huge variability based on the land quality and the management. So while one might not like getting professional advice it would be seriously advisable when dealing with something where mismanagement can have such serious consequences.

Personally if I was planting more land now I would be looking at using VP material. From reading the UK research and reviewing the UK experience it looks like it would be very well worth it.

Yes you are right, in all endeavours, be careful

benjydagg

Jack180570 wrote: »

Hi Dalton, the trees are your property from day one till they are clearfelled. Unless you have a very poor unstable site you will not be (nor should you want to) clearfelling them at year 20, more like as other contributors have said, 30-40.

Regarding the price of 10k/ac: this is the value of an acre of very good forestry ready for clearfell at the moment. An average acre would be worth somewhere between 5-7k/ac and an acre of poorly thinned forestry would be worth around 2k/ac. There is huge variability based on the land quality and the management. So while one might not like getting professional advice it would be seriously advisable when dealing with something where mismanagement can have such serious consequences.

Personally if I was planting more land now I would be looking at using VP material. From reading the UK research and reviewing the UK experience it looks like it would be very well worth it.

Yes you are right, in all endeavours, be careful

Forestry is a great investment. I wish I had started earlier in life. Not an advert but I use Theforestrycompany.ie

dalton 1

Jack180570 wrote: »

Hi Dalton, the trees are your property from day one till they are clearfelled. Unless you have a very poor unstable site you will not be (nor should you want to) clearfelling them at year 20, more like as other contributors have said, 30-40.

Regarding the price of 10k/ac: this is the value of an acre of very good forestry ready for clearfell at the moment. An average acre would be worth somewhere between 5-7k/ac and an acre of poorly thinned forestry would be worth around 2k/ac. There is huge variability based on the land quality and the management. So while one might not like getting professional advice it would be seriously advisable when dealing with something where mismanagement can have such serious consequences.

Personally if I was planting more land now I would be looking at using VP material. From reading the UK research and reviewing the UK experience it looks like it would be very well worth it.

Yes you are right, in all endeavours, be careful

Thank you for the information Jack180570.
As i said above i am in the very early stages of planning to plant approx 25 acres of land (20 Acres good quality land 5 acres poor wet land with a high water table)
i have nothing agreed or planted yet but have had 3 forestry companies out on the land. i feel 2 of them(large forestry companies) did not the best interest of me or the future forest in mind.
What did you mean by VP material?

Jack180570

benjydagg wrote: »

Forestry is a great investment. I wish I had started earlier in life. Not an advert but I use Theforestrycompany.ie

Hi Benjydagg... I totally agree with you, forestry IS an excellent investment... I was lucky to start when I was 24... once again not an advert but I use Mid Western Forestry.. thinning began on parts of the first sites at year 14 because of potential poor stability and last year we had a first thinning on a stable 19yr old site and third thinning on another site (post thin ave dbh of 22cm!)... also spread fertiliser on most of that site. There are poor bits on most farms and they would surely be better growing trees than in mainstream farming, especially now with being able to get paid the single farm payment along with the forestry premium... and when you add in the timber value... its really a no brainer!

Jack180570

dalton 1 wrote: »

Thank you for the information Jack180570.
As i said above i am in the very early stages of planning to plant approx 25 acres of land (20 Acres good quality land 5 acres poor wet land with a high water table)
i have nothing agreed or planted yet but have had 3 forestry companies out on the land. i feel 2 of them(large forestry companies) did not the best interest of me or the future forest in mind.
What did you mean by VP material?

No worries Dalton, sorry about the abbreviation... VP material refers to the planting stock 'Vegetative Propagation'.
Its basically plant breeding. Traditionally, as in cattle breeding you breed from the best, with cattle that might be on a 3-5yr cycle but with trees not bearing cones for maybe 15yrs, the rate of improvement is much slower, so, breed using cuttings rather than cones (seeds).
Cuttings are taken from the best trees and grown on and then cuttings are taken from those trees and grown on...

I think that forestry is like a lot of other businesses and they have to make money. Like all trades there will be good ones and bad ones. A good forester is an essential asset (I think) when it comes to planting a forest, now the only question then is 'what constitutes a good forester!'... sound technical forestry knowledge, sound farming knowledge (you want to get your sfp along with your forestry premium), a forester with experience (the 'book' can only teach him/her so much), and finally and most importantly, someone who is honest and of high integrity...
Warren Buffett famously said about the qualities you look for in a person you want to hire '“In looking for people to hire, you look for three qualities: integrity, intelligence, and energy. If you don’t have the first, the other two will kill you. You think about it; it’s true. If you hire somebody without [integrity], you really want them to be dumb and lazy.”

Massey10

dalton 1 wrote: »

Thank you for the information Jack180570.
As i said above i am in the very early stages of planning to plant approx 25 acres of land (20 Acres good quality land 5 acres poor wet land with a high water table)
i have nothing agreed or planted yet but have had 3 forestry companies out on the land. i feel 2 of them(large forestry companies) did not the best interest of me or the future forest in mind.
What did you mean by VP material?

If you have good land its not a good investment to plant it .The value of your land will be down from around 12k per acre to around 4k .

Jack180570

Massey10 wrote: »

If you have good land its not a good investment to plant it .The value of your land will be down from around 12k per acre to around 4k .

Hi Massey10, I totally agree with you. Its madness planting good agricultural land. Its simple really, if you cannot farm it or cannot make enough from it then sell it and buy 2-3 times more forestry land and plant it. Funny enough when you do the math then it shows just how profitable forestry is.
For a silly example, take a farmer on 100ac of very good agricultural land milking say 80 cows with the average sfp of €10,000 and for whatever reason he wants to get out of the cows and rather than plant the land he decides to sell it. He gets 12k an acre and buys 300ac of forestry type land and 80 more entitlements of average value for 4k an acre. He plants the land.
His income then from the 300 acres is €173ac (forestry premium) + €100ac (single farm payment) = €81,900 per year... and that is not counting the increase in the value of the growing timber which should be something around €60,000 per year... also not counting that both the annual forestry premium and the sale of timber is free from income tax... Dont know many 100ac dairy farmers making this kind of money..

The_Pretender

Jack180570 wrote: »

Hi Massey10, I totally agree with you. Its madness planting good agricultural land. Its simple really, if you cannot farm it or cannot make enough from it then sell it and buy 2-3 times more forestry land and plant it. Funny enough when you do the math then it shows just how profitable forestry is.
For a silly example, take a farmer on 100ac of very good agricultural land milking say 80 cows with the average sfp of €10,000 and for whatever reason he wants to get out of the cows and rather than plant the land he decides to sell it. He gets 12k an acre and buys 300ac of forestry type land and 80 more entitlements of average value for 4k an acre. He plants the land.
His income then from the 300 acres is €173ac (forestry premium) + €100ac (single farm payment) = €81,900 per year... and that is not counting the increase in the value of the growing timber which should be something around €60,000 per year... also not counting that both the annual forestry premium and the sale of timber is free from income tax... Dont know many 100ac dairy farmers making this kind of money..

What way do the grants work? Do you have to be a farmer?

Lets say I had a full time job but owned 300 acres of land. Could I just plant those 300 acres and get €81,900 per year for what is it, 20 years? Could you just plant the land, and register for SFP since you are running a farming enterprise? Or do you have to be/have been doing some other form of farming first?

$kilkenny

non farmers get 15 years of premiums, farmers get 20 years and more moeny per hectare, i.e if the land they plant was farmed by them for some years before that.
but take the SFP out of the idea, 173 euro per hectare of land, so 300 acres is approx 125 hectares, at being a non farmer and if possible you plant sitka then you stand to get just over 21,000 a year.
that would repay 5 acres a year if bought for 4k per acre, thats before you get into your first thinning which will be a nice lump sum, and by the 2nd thinning the place will moreless be paid off.... thats the premium gone but you still have 2 thinnings left and the possibility to make 10,000 euro per acre if its all good quality and even for clearfell in year 30, that 3million or so.

it would make a lovely part of your will for the second rotation in years to come to pass onto your youngsters
it will be my life plan haha

Massey10

Jack180570 wrote: »

Hi Massey10, I totally agree with you. Its madness planting good agricultural land. Its simple really, if you cannot farm it or cannot make enough from it then sell it and buy 2-3 times more forestry land and plant it. Funny enough when you do the math then it shows just how profitable forestry is.
For a silly example, take a farmer on 100ac of very good agricultural land milking say 80 cows with the average sfp of €10,000 and for whatever reason he wants to get out of the cows and rather than plant the land he decides to sell it. He gets 12k an acre and buys 300ac of forestry type land and 80 more entitlements of average value for 4k an acre. He plants the land.
His income then from the 300 acres is €173ac (forestry premium) + €100ac (single farm payment) = €81,900 per year... and that is not counting the increase in the value of the growing timber which should be something around €60,000 per year... also not counting that both the annual forestry premium and the sale of timber is free from income tax... Dont know many 100ac dairy farmers making this kind of money..

The €80000 is nice for sure for 20 years how much after that .If he had dairy farm to pass on or sell it would be worth alot more .

benjydagg

$kilkenny wrote: »

non farmers get 15 years of premiums, farmers get 20 years and more moeny per hectare, i.e if the land they plant was farmed by them for some years before that.
but take the SFP out of the idea, 173 euro per hectare of land, so 300 acres is approx 125 hectares, at being a non farmer and if possible you plant sitka then you stand to get just over 21,000 a year.
that would repay 5 acres a year if bought for 4k per acre, thats before you get into your first thinning which will be a nice lump sum, and by the 2nd thinning the place will moreless be paid off.... thats the premium gone but you still have 2 thinnings left and the possibility to make 10,000 euro per acre if its all good quality and even for clearfell in year 30, that 3million or so.

it would make a lovely part of your will for the second rotation in years to come to pass onto your youngsters
it will be my life plan haha

$kilkenny, i'm 48 and that's my life plan! I started too late, but my kids will see the real benefits. I borrow to buy forestry land. Total of 200 acres commercial at the moment, working on the next project as we speak. My borrowings are high, I managed to get 100% finance with some of the plots, which was madness on the bank's behalf, but this current one is 30% deposit and 70% bank finance.
I meet farmers every day in my day job, and explain the theory behind investing in forestry, and, like my father they all say "it's too good to be true, there must be a catch".
It is written in stone that land planted from 2009 will be eligible for SFP and forestry paremia until the next CAP review in 2020.
Therefore, if a farmer was to spend €200,000 buying 50 acres, and buy 20 entitlements at €500/ha (costing 2 times face value), for an outlay of €230,000 ( includes all costs) he/she would generate €8,600 from forestry premia & €9,000 from SFP. Total of €17,600.
To borrow ALL would cost approx €19,700/yr/20yr.
So for an investment of €3,000/yr (including life assurance, compulsory) in 20 years the investor owns 50 acres of semi mature forestry, with roads in place. At that stage even if it only made €4,000/ac the investor has a lump sum of €200,000 TAXFREE.

But the piece of information that farmers forget is; the interest on the borrowings is allowed against the farm profits. So by borrowing to make an "off farm" investment, you get a tax free return, AND tax back.

It really is that simple.
I never made it to college.
Just a simple farm boy.

Jack180570

The_Pretender wrote: »

What way do the grants work? Do you have to be a farmer?

Lets say I had a full time job but owned 300 acres of land. Could I just plant those 300 acres and get €81,900 per year for what is it, 20 years? Could you just plant the land, and register for SFP since you are running a farming enterprise? Or do you have to be/have been doing some other form of farming first?

Lots of questions there but I will do my best to answer...

Under the current forestry scheme rules, to be eligible to get paid sfp and forestry premium, the LAND had to have been submitted for spf in 2008 and sfp had to have been paid to the owner, then it is eligible land.

For the farmer to be eligible for sfp, he/she does not have to keep any stock (currently, but expect that to change), what he/she has to do is keep the land in Good Agricultural and Environmental Condition (GAEC). SFP is part of the RDR and as such eligibility and payment is based on 7 yr terms but will be 6 yr this time due to the current RDR being rolled over for an extra year. Important to note here that eligibility for sfp is an annual event and you would need to be doing a minimum level of farming on a minimum area.

Forestry premium is paid for a 20yr period based on eligibility being proven prior initially on a once off basis. A standard form of proof would be an active herd number which would not be too difficult in most situations and certainly if you were planting that amount of land, if you have a competent forester with good knowledge of farming and forestry, he/she would have no problem in ensuring you would qualify.

I hope this has been helpful

Jack180570

$kilkenny wrote: »

non farmers get 15 years of premiums, farmers get 20 years and more moeny per hectare, i.e if the land they plant was farmed by them for some years before that.
but take the SFP out of the idea, 173 euro per hectare of land, so 300 acres is approx 125 hectares, at being a non farmer and if possible you plant sitka then you stand to get just over 21,000 a year.
that would repay 5 acres a year if bought for 4k per acre, thats before you get into your first thinning which will be a nice lump sum, and by the 2nd thinning the place will moreless be paid off.... thats the premium gone but you still have 2 thinnings left and the possibility to make 10,000 euro per acre if its all good quality and even for clearfell in year 30, that 3million or so.

it would make a lovely part of your will for the second rotation in years to come to pass onto your youngsters
it will be my life plan haha

Hi $Kilkenny, Im guessing that you have not bought and planted land on the basis you explain above, if you have then it has been a suboptimal investment. Planting on the non-farmer rate is hard to justify considering the minimal amount of work required to get the farmer rate and the significant addition revenue it generates.

Working in the SFP into the investment adds significantly to the returns but in some cases is not possible. But where possible it should be incorporated.

The investment thesis as set out above by you would not be attractive to most people IMHO.

Jack180570

benjydagg wrote: »

$kilkenny, i'm 48 and that's my life plan! I started too late, but my kids will see the real benefits. I borrow to buy forestry land. Total of 200 acres commercial at the moment, working on the next project as we speak. My borrowings are high, I managed to get 100% finance with some of the plots, which was madness on the bank's behalf, but this current one is 30% deposit and 70% bank finance.
I meet farmers every day in my day job, and explain the theory behind investing in forestry, and, like my father they all say "it's too good to be true, there must be a catch".
It is written in stone that land planted from 2009 will be eligible for SFP and forestry paremia until the next CAP review in 2020.
Therefore, if a farmer was to spend €200,000 buying 50 acres, and buy 20 entitlements at €500/ha (costing 2 times face value), for an outlay of €230,000 ( includes all costs) he/she would generate €8,600 from forestry premia & €9,000 from SFP. Total of €17,600.
To borrow ALL would cost approx €19,700/yr/20yr.
So for an investment of €3,000/yr (including life assurance, compulsory) in 20 years the investor owns 50 acres of semi mature forestry, with roads in place. At that stage even if it only made €4,000/ac the investor has a lump sum of €200,000 TAXFREE.

But the piece of information that farmers forget is; the interest on the borrowings is allowed against the farm profits. So by borrowing to make an "off farm" investment, you get a tax free return, AND tax back.

It really is that simple.
I never made it to college.
Just a simple farm boy.

Hi benjydagg, just a word of caution, you say that 'It is written in stone that land planted from 2009 will be eligible for SFP and forestry paremia until the next CAP review in 2020', this is not totally accurate.
As per my previous post there is specific criteria that the land has to satisfy before it is eligible for sfp + forestry premium.
Also it is not guaranteed beyond 2020 so would not be prudent to rely on it for capital repayment purposes beyond that date.
One could also say that the repayment plan is somewhat over-reliant on SFP contribution when you use entitlement values of €500ha (almost twice the national average) when we see that the EU's stated policy is to have all SFP paid out at around €250. This convergence will happen most likely in the 2020-2027 edition of the RDR.
Finally regarding taxation - while the forestry premium is free from income tax it is not free from USC & PRSI. The SFP is liable for all taxes. Finally sale of timber is only tax-free up to a certain limit.

Overall I do believe that forestry is an excellent investment but I would say that you need to have competent professional advice covering forestry, farming and taxation to avoid potholes. One of my negatives toward forestry professionals is that many of them are not competent in the area of farm schemes (SFP) and taxation and while giving you advice they are not liable for errors if their advice is only partially correct.

Fair play to you, you have made great progress and the best of luck with the next project.

benjydagg

Jack180570 wrote: »

Hi benjydagg, just a word of caution, you say that 'It is written in stone that land planted from 2009 will be eligible for SFP and forestry paremia until the next CAP review in 2020', this is not totally accurate.
As per my previous post there is specific criteria that the land has to satisfy before it is eligible for sfp + forestry premium.
Also it is not guaranteed beyond 2020 so would not be prudent to rely on it for capital repayment purposes beyond that date.
One could also say that the repayment plan is somewhat over-reliant on SFP contribution when you use entitlement values of €500ha (almost twice the national average) when we see that the EU's stated policy is to have all SFP paid out at around €250. This convergence will happen most likely in the 2020-2027 edition of the RDR.
Finally regarding taxation - while the forestry premium is free from income tax it is not free from USC & PRSI. The SFP is liable for all taxes. Finally sale of timber is only tax-free up to a certain limit.

Overall I do believe that forestry is an excellent investment but I would say that you need to have competent professional advice covering forestry, farming and taxation to avoid potholes. One of my negatives toward forestry professionals is that many of them are not competent in the area of farm schemes (SFP) and taxation and while giving you advice they are not liable for errors if their advice is only partially correct.

Fair play to you, you have made great progress and the best of luck with the next project.

Thanks. Personally, I only borrow for 15 year term now due to my age. The first thinnings are due from Norway Spruce before christmas, and Sitka in January. Lets see if i'm as positive after the thinning!
The opportunity for the older farmers in disadvantaged areas to put up to 50% of their farms in forestry, and still claim SFP should be a great bonus to the economy. However these farmers still see forestry as a sign of failure as farmers.

Jack180570

benjydagg wrote: »

$kilkenny, i'm 48 and that's my life plan! I started too late, but my kids will see the real benefits. I borrow to buy forestry land. Total of 200 acres commercial at the moment, working on the next project as we speak. My borrowings are high, I managed to get 100% finance with some of the plots, which was madness on the bank's behalf, but this current one is 30% deposit and 70% bank finance.
I meet farmers every day in my day job, and explain the theory behind investing in forestry, and, like my father they all say "it's too good to be true, there must be a catch".
It is written in stone that land planted from 2009 will be eligible for SFP and forestry paremia until the next CAP review in 2020.
Therefore, if a farmer was to spend €200,000 buying 50 acres, and buy 20 entitlements at €500/ha (costing 2 times face value), for an outlay of €230,000 ( includes all costs) he/she would generate €8,600 from forestry premia & €9,000 from SFP. Total of €17,600.
To borrow ALL would cost approx €19,700/yr/20yr.
So for an investment of €3,000/yr (including life assurance, compulsory) in 20 years the investor owns 50 acres of semi mature forestry, with roads in place. At that stage even if it only made €4,000/ac the investor has a lump sum of €200,000 TAXFREE.

But the piece of information that farmers forget is; the interest on the borrowings is allowed against the farm profits. So by borrowing to make an "off farm" investment, you get a tax free return, AND tax back.

It really is that simple.
I never made it to college.
Just a simple farm boy.

benjydagg wrote: »

Thanks. Personally, I only borrow for 15 year term now due to my age. The first thinnings are due from Norway Spruce before christmas, and Sitka in January. Lets see if i'm as positive after the thinning!
The opportunity for the older farmers in disadvantaged areas to put up to 50% of their farms in forestry, and still claim SFP should be a great bonus to the economy. However these farmers still see forestry as a sign of failure as farmers.

Your welcome benjydagg, you have made great progress fair play to you. Best of luck with the thinning and please do let us know how it works out for you. Are you managing the thinning yourself or getting a forester to manage it? What way are you selling the thinning, standing or roadside? flat rate or by category? What age are those forests now? ave dbh? Are you planning to take out much in the thinning? Sorry for all the questions, just really curious!

Finally regarding your last point, the rules re sfp and the % of a farm that you can plant has changed, now the rule re 50% planting is gone, you just need to maintain a minimum area in farming

$kilkenny

Jack180570 wrote: »

Hi $Kilkenny, Im guessing that you have not bought and planted land on the basis you explain above, if you have then it has been a suboptimal investment. Planting on the non-farmer rate is hard to justify considering the minimal amount of work required to get the farmer rate and the significant addition revenue it generates.

Working in the SFP into the investment adds significantly to the returns but in some cases is not possible. But where possible it should be incorporated.

The investment thesis as set out above by you would not be attractive to most people IMHO.

unfortunately very true the real value of timber comes to me after 30 years in the clearfell stage, the thinnings and premium will pay off the loan and then its down to the end result.
ideally its kinda the same for anyone who buys land to plant as far as i'm aware....

bradygaz

Great thread from someone starting to look in to the area of forestry investment.... Any updates in the last 2 years... How are people's plans progressing? People expand forests?

benjydagg

I've recently bought 47 acres in Limerick for €4,500/ac. It will give €206/ac per year for 15 years premium. Also it is eligible for BPS.
I have sold 30 acres of 10 year old conifer as it was low yielding, and the profit was tax free.
Difficult to buy at the moment, as non farmers are now treated the same as full time farmers.

bradygaz

I am non farmer, does this benefit me or disadvantage me in terms of what you said above?

Seems to be lots of forestry for sale online... As said literally a day in to investigating this so lots of reading ahead. Only 34 so seems to be best to get in as young as possible.

Lots to consider and calculate... Buy young forest for premium or buy mature for quicker medium term lump sum clear fell revenue.... Also want to explore agroforestry to see if can make a small secondary revenue off the land if at possible and allowed!

benjydagg

bradygaz wrote: »

I am non farmer, does this benefit me or disadvantage me in terms of what you said above?

Seems to be lots of forestry for sale online... As said literally a day in to investigating this so lots of reading ahead. Only 34 so seems to be best to get in as young as possible.

Lots to consider and calculate... Buy young forest for premium or buy mature for quicker medium term lump sum clear fell revenue.... Also want to explore agroforestry to see if can make a small secondary revenue off the land if at possible and allowed!

http://www.agriculture.gov.ie/media/migration/forestry/grantandpremiumschemes/2015/AfforestationSchemeEd2190315.pdf

SILVAMAN

Carlowgirl wrote: »

Hi
Not sure if this should be in investments section or here. I am looking for an investment. I am currently renting a house as I am away for work and don't know where I ll end up settling. I am not a farmer so do not have a herd number. A parcel of land nearby has come up suitable for forestry. It costs around 80,000 with a return of 4,000 a year for twenty years. Couple of questions.
A) How much would it cost me to get a herd number i.e. is it possible to get a couple of goats to put on the land
b) would these goats have to be tb tested etc and resul in high vet bills
c) What happens to the land after 20 years?
Would it cost a lot of money to return it to grass land or would it be worth anything?
Any help greatly appreciated

Over the last number of years I,m seeing huge differences in volume and tree quality in growth between land the parents planted back in the 80s-it was mountain land-to mineral soils I planted in the late 90s-head and shoulders above the mountain land. Make sure your land is mineral soil, or a raised peat.

benjydagg

bradygaz wrote: »

I am non farmer, does this benefit me or disadvantage me in terms of what you said above?

Seems to be lots of forestry for sale online... As said literally a day in to investigating this so lots of reading ahead. Only 34 so seems to be best to get in as young as possible.

Lots to consider and calculate... Buy young forest for premium or buy mature for quicker medium term lump sum clear fell revenue.... Also want to explore agroforestry to see if can make a small secondary revenue off the land if at possible and allowed!

Non farmers are treated the same as full time farmers now. 15yr of premia. http://www.agriculture.gov.ie/media/migration/forestry/grantandpremiumschemes/2015/AfforestationSchemeEd2190315.pdf