Buying Land and Planting Forestry as An Investment. Viable?

blobert

Hello,

I'd looked into this about 4/5 years ago and at the time it seemed the only way of making a decent return on forestry was if you owned the land already. It seemed as though all the cheapest available suitable land (in cheapest areas like Leitrim/Donegal etc) was priced based on forestry grants, ie it was more far expensive than it would be if forestry grants were not an option.

I see that the grants have improved a bit in the last year or two but am wondering if this is enough to make it a useful investment. I see there was a British investment fund looking to do this at scale but I did not see others coming into the space: https://www.breakingnews.ie/ireland/explained-controversial-coillte-deal-with-british-investment-fund-1421271.html

So I was wondering if people think there is an opportunity here? I'd be looking to buy 100+ acres of land and plant this. I'm not sure if there's advantages to doing one big plantation vs several smaller ones, I'm guessing the one bigger one is easier for later felling.

I'm guessing also a lot of the returns are based on future timber values which are unknown, while I can work out the return based on price of the land and the grants the future timber price is less certain.

Any thoughts on this would be much appreciated.

Thanks in advance.

blue5000

Probably cheaper to buy clear felled forestry land, but there won't be a grant to plant it. One of the drawbacks is that you will only be allowed plant 65% of it in spruce, rest has to be broadleaves.

On the plus side it might already have roads and fencing, that just need repairs instead of starting from scratch.

Apiarist

https://www.boards.ie/discussion/comment/122042658#Comment_122042658

This is very interesting, though I don't understand — there is no grant to re-forest a clear felled land?

$kilkenny

https://www.boards.ie/discussion/comment/122180110#Comment_122180110

By the time you buy grassland that you can claim grants on, you could buy clearfelled land, plant it, maintain it and have a crop of trees for half the value of the grass land.

Added bonuses being roading will already be installed from the pervious harvest and the major one, no input or meddling from the Department on what you can, cannot plant and taking forever to plant some trees.

Good loser

https://www.boards.ie/discussion/comment/122180110#Comment_122180110

That's correct. Virgin land for planting costs €6000 plus per acre. While clearfelled land can be bought for about €2000 per acre.

boardjames

Forestry does seem like it could be a good investment if you can get started at the right scale. I've heard mixed things about buying virgin land vs replanting cleared areas as well. One thing to consider is does the cleared land have good existing infrastructure like roads? That could help reduce future costs.

AfricaTwin

Do your research on pests and diseases.

Peter T

Skimming around on this topic myself. Is there an advantage to buying mature forestry ? I've seen pots with spruce at 20 years old coming up but question why is it for sale in the first place at that stage or has it just been maintained poorly.

I'm looking at this as something long term which could be a nice side project for myself to cover my original investment which could then be something for my kids down the line to keep going or just sell up and pocket whatever comes out of it.

blue5000

https://www.boards.ie/discussion/comment/122636102#Comment_122636102

Reason it's for sale is because the premiums are finished.

Peter T

No good to me so. Back to the drawing board

dto001

Sorry for hijacking this,

If "virgin" Land was to become available at the right price how do you know it will get approval for afforestation?

Also (asking a silly question) I assume that the cost of planting comes from the first grant? and what is the minimum amount of land that can be planted?

tabby aspreme

https://www.boards.ie/discussion/comment/122638998#Comment_122638998

How much is 20 yo forestry being sold for, per acre

Peter T

I'm only looking at what advertised with a price but its working out at 4.5-6k for 20 year sika. Could be a totally different scenario when the phone is picked up

*should mention that that's the process per acre

coolshannagh28

https://www.boards.ie/discussion/comment/122637829#Comment_122637829

This is where the money is made ..the timber is growing at its fastest rate now and for the next 15 or 20 years to clearfell

cap.in.hand.

https://www.boards.ie/discussion/comment/122664790#Comment_122664790

That's great value as you'd own the land as well as the 20 yr Sitka trees on it.... mightn't be the best of Land but the trees growing will keep it dry