DECIDE WHAT YOU WANT TO EARN, THEN BUY WHAT IT TAKES TO EARN IT
Compound annual
returns of 11% to 15%, all taxable at long-term rates, some with deductible
payments, can be obtained in timber investments in the area shown in http://www.vardaman.com/greensheets/world.htm. A thorough discussion of them appears at http://vardaman.com/greensheets/under.htm. But you must acquire land and trees with the
essential characteristics; just throwing a dart at the map is especially likely
to fail in these investments. Identifying them requires lots of homework. For openers, land under the trees must have a 25-year site index
of 65 feet or more; it must border on a public road and contain no
space that won’t grow trees. Its cost must be in line with its productivity. The plantation to be created must contain seedlings with proper genes,
size, and spacing with proper site preparation, first-year culture, and
fertilization. If all characteristics don’t pass these tests, the cost must be adjusted accordingly. To see a sample of the required homework,
click on http://www.vardaman.com/greensheets/vital.htm. Don’t get discouraged by the length of the
process. You’ll be re-paid handsomely, and we’ll help you.
22-24 years from date of planting are needed to grow a crop that will produce this return. If this period is too long, you must buy an
older plantation. Tracts that can be bought
are rare. Long-term leases on
plantations or land on which to plant trees are widely available at attractive
prices, but have two disadvantages: 1) their liquidity is reduced, and 2) the
landowner must be able to buy it back according to a formula so he can cope
with an unpredictable future while assuring a suitable return for you. Finally, you must choose the size, age,
and geographic area of investment, for example, 75-100 acres seven years old
within 100 road miles of Columbus, GA. Going through these steps will enable you to describe in considerable
detail what you want to buy and save the time of sellers whose tracts don’t
qualify.
So far our Internet sites are designed to help sellers of merchantable timber and
timberland. We think they can help investment
buyers who post detailed requirements. To enable us to test this idea with actual transactions, we offer free
of charge to help the first three potential investors with the calculations
described in the first paragraph. Send us your basic requirements, and we’ll exchange e-mails.
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