If you are looking for a lucrative real estate investment, don’t overlook the benefits of investing in timberland. This asset is a great way for land investors to make a profit not only now, but well into the future. You don’t need a lot of expertise and you can see a decent return on your investment, what’s not to love?
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Keep reading to learn the top reasons you should consider investing in timberland.
An Asset That Grows
If you can handle owning a physical asset, rather than investing via the stock market, timberland can help your investment grow well into the future. Investing in timberland does require some expertise or the ability to hire someone with the necessary expertise, but if you do, you stand to have the following benefits:
- You have a long-term investment that will grow over time
- You can choose to halt harvesting during times that the market prices fall
- There’s little work involved
- Timberland gets more valuable as it grows
- Timberland typically outperforms your standard returns in the stock market
You Earn Money Without Selling
Timberland can provide you with a passive stream of income during times when the market value is high. Not only will your land appreciate as the trees grow, but you can earn cash in hand when you sell some of the timberland throughout your investment period.
The money that you can earn on your investment is often tax-efficient. Even if you do have capital gains, they are long-term returns, which can help decrease your tax liability as a result of earning money on your investments.
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Appreciation is Common
Any investment is risky, but investing in timberland often results in a more stable investment. You don’t have to worry about the ups and downs of the real estate market or the stock market. Timberland stands on its own, appreciating and depreciating at its own pace.
Timberland can be a great way to diversify your portfolio. Even if you invest in real estate, putting some of your money in timberland can give you a little stronger portfolio. If the real estate market plummets, there’s still a good chance that timberland will hold its value. Even if you don’t invest in real estate directly, investing in the stock market can be even more volatile, which timberland can then provide the stability that you need.
Timber is Always Needed
Investing in an asset that you know someone will always need can be reassuring. While timberland is widely used/needed in the United States, the demand in other countries has been increasing too. With the higher demand will come higher values, which may mean a greater return on your investment.
If you can make timberland a long-standing investment in your portfolio, it has many benefits that can help you diversify your portfolio as well as see decent returns on your investment. Don’t overlook the value of investing in timberland, even if you don’t think you have the expertise necessary – it’s a great investment to consider.
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