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Put Your Money In Hardwood, It’s A Solid Investment
October 26, 2009Article by Ray Withers
Hardwood investment is as solid financially as it is literally, especially investment in the growth and manufacture of tropical hardwood products.
The demand for tropical hardwood products is increasing exponentially around the world, with the recent boom in wood flooring increasing the already incredible growth in demand for hardwood furniture.
At the same time, the world does not want to cut down our precious rainforests, and in fact there are strict laws restricting deforestation very severely. So the trend is for tropical hardwood plantations, trees being planted specifically to be harvested and sold as tropical hardwood products.
Unfortunately demand is still increasing faster than the supply can keep up with, and as a result the price of hardwood products is increasing rapidly.
The return on hardwood investment is higher than you would find on other investments in its class for obvious reasons: you are buying seedlings, which are obviously a lot less expensive than the wood products harvested from the trees that they grow into.
“Hardwood investment reminds me of the Jack and the Beanstalk fairytale. If I held out my hand with 20 or so Teak tree seeds and said that in 15 years they would make you £256,000, you wouldn’t believe me, but that is what our hardwood investment products are offering,” said Ben Jeffries a sourcing manager with international investment consultancy Property Frontiers.
Ben was referring to the firm’s hardwood investment products im Sabah Malaysia and Sri Lanka plantations. The low level product is a 10 year investment in Agarwood trees for £10,000, during which time you have a say in harvest dates, which determine the rate of your returns. The Agarwood product is expected to return profits in excess of £40,000.
Then there is the 15 year Teak investment mentioned by Ben, which, as he said returns £256,000 from an investment of £15,000.
“The international downturn forced everyone to look at just how good safe property was as a capital investment, especially when you look at how few property developments are acceptable as part of a self invested pension plan. The hardwood investments that we offer are the perfect way to diversify a property portfolio, they are accepted as part of a SIPP, and they can give regular returns or a lump sum at the end of the term,” Jeffries concluded.