Evaluating Teak and Timber Investment Opportunities Waterville ME

 
Timber is one of the safest and steadiest growth investments available, protecting an investor in times of inflation, and providing returns that have beaten almost every other investment sector over the past 40 years. Teak in particular offers one of the best values and highest yields in the timber sector. It is a small niche segment of the timber industry and is managed by smaller, privately owned companies rather than by big institutional operators.
 
There are a number of ways to invest in teak with small very reputable timber companies. How you invest — and with which company — can have a significant effect on your returns. The key question you must ask is: “What assets am I buying with my investment funds?”
 
As you research the opportunities and subsequent returns in teak investments, you will find that companies use many different ways to calculate return on investment. As you compare investments and predicted returns, be sure that you apply the same standards to each investment opportunity. There are different ideas concerning what teak will be worth in 25 years, as well as many different predictions of how much teak will be available — and what condition it will be in over time. Therefore, the most useful investment comparisons consider what assets you’re getting for your investment dollar, rather than what your dollar will be worth at some point in the future. To put it another way, determine how much of your investment is actually going into the company’s products and assets.
 
(Please note that in some countries, Panama, for example, there are resident visa packages related to timber and teak investment available. Since there are many extra expenses for companies involved in such programs, know that with these packages you are paying for the resident visa in addition to the teak investment. If you are not interested in the resident visa, you should avoid these programs. The teak resident visa packages normally cost about $20,000 to $40,000 per hectare. For the sake of simplicity, this article will not consider these teak resident visa packages.)
 
When evaluating a return on a timber investment, it is important to understand what data the company is using and how it is using the data. Such data may include price per unit and growth rate.
 
Teak is a commercial wood, which means the price per unit is pretty well fixed at different sizes and ages of the stand, and at different points of being processed (i.e. price of trees on the stump, price of logs FOB (freight on board), and price of cants, (square sawed logs) or the price of rough cut lumber). The average sale price of mature teak in 2009 is about $500 US dollars per cubic meter for raw logs; rough cut lumber will wholesale at around $1,200 to $1,800 per cubic meter. As the timber is further processed by a company, the fewer middle men are involved and the greater the overall return on investm...

Click here to read the rest of this article from NuWire Investor