Why plant trees?

Timber has a long track record of providing good and consistent returns since medieval times when the Kings and Queens of Europe saw the value of forests and their wood. In recent times large insurance companies and individual investors have added timber to their investment mix as a diversification and an inflation hedge to their portfolios. Timber has seen prices steadily increase over the last 100 years. A timberland portfolio would have returned 13.3% over the last 40 years compared with 11.6% for the S&P 500 (Timber!, 10-16-01, Smart Money). As the population of the world and destruction of the rainforests continues to increase the value of timber should continue to grow. In addition to the investment benefits of timber, planting trees can do great things for the environment. Trees take carbon out of the atmosphere and replace it with oxygen reducing the effects of greenhouse gases on global warming. Trees reduce soil erosion and water runoff keeping topsoil in place and keeping streams and rivers clean and clear. Trees also provide important habit for a variety of wildlife.

Why teak?

Teak is one of the fastest growing and most valuable woods in the world. Teak matures in 20 to 25 years compared with 40 to 100 year maturities for some similar types of tropical hardwoods. Teak has an established market and because of its strength and aesthetic qualities teak is the tropical hardwood most in demand for a specific market of "luxury"
applications including furniture, shipbuilding and decorative trims. In its natural habit, (India, Myanmar, Laos and Thailand) teak has been nearly wiped out from the forests. Teak has been successfully grown in plantations for over one hundred years and grown in Costa Rica for over 25 years.

Why Costa Rica?

Costa Rica is a beautiful and stable country perfectly suited for growing teak trees. Costa Rica has enjoyed a stable and functional government for more than 100 years. Costa Rica is a peace loving country that abolished its Military in 1948. Costa Rica is a country committed to the environment. In 1970 Costa Rica established a national park system and since has protected nearly 27% of the countryʼs land. Finally, Costa Rican climate is perfect for growing teak, it grows best in a range of temperatures of 75 to 85 degrees, average rainfall of 50 to 150 inches per year, fertile soils, and elevation less than 1000 meters above sea level. Costa Rica fits perfectly into all of these criteria.

How is the Bauers Family Tree Farm managed?

The Bauers Family Tree Farm manages its farm with the oversight of professional forest engineers that have experience managing farms in Costa Rica for over 20 years. The farm has been selected for its suitability for growing teak in all respects including proper soils, sufficient rainfall, correct topography and adequate local manpower to manage and work the farm. The farm has been independently evaluated by a professional forest engineer prior to purchase. Only seedlings grown from seeds certified as the highest quality by the government are used on the farm.

What about security?

Security is a part of management of the farm. There will be an on site security guard that will live on the farm full time. In the first years the principal goal of security is to maintain the health and well being of the young trees. As the trees grow and their values increase security is maintained to prevent theft of the trees.

What are the risks?

Acts of God, weather, fires, insects, pests and diseases are all risks to the health of the farm and the trees. The Bauers Family Tree Farms does its best to mitigate these risks by diligent management and by selecting locations that are rarely effected by such ailments. Hurricanes, as far as we can tell, have never been a problem in the pacific northwest of Costa Rica where the farm are located. Fires rarely occur in the humid tropics, but just in case the farm will be kept clear of undergrowth and debris that could accelerate any fire. Because of the density and oil content of teak, very few pests are a problem. However, the farms are carefully monitored and our forest engineers will act quickly to avert any problems.

What are the tax consequences of an investment in Costa Rica?

US citizens are taxed by the IRS on their worldwide income. The good news is that taxes are only due upon the sale of an asset and the receipt of proceeds.

Is forest being cut down to make room for teak?

No, it is just the opposite. The Bauers Family Trees Farm has selected a farm that was deforested years ago to make room for cattle pastures. Of the 260 acres on the farm, approximately 120 acres are natural forests with a variety of native trees. These 120 acres will be protected and kept natural for generations to come.