Forestry might not be to everyone's taste, but there is a growing crop of investors who believe that woodlands provide an interesting buffer to the turbulence of the stock market or the sky-high price of property.

The most immediate attraction is that returns on forestry investments are exempt from tax, giving the masses a small taste of the tax-free opportunities enjoyed by the high rollers of the horse breeding industry.

Neither do you have to belong to the millionaires club to get a piece of the action, with IFS Asset Managers setting the minimum investment at 750 for the forestry growth plan it launched last week.

And there are less tangible benefits such as the comfort of investing in something you can feel and touch. There is also a feelgood factor in knowing that your savings are being used to to replenish Ireland's depleted forest cover, although environmentalists would argue that covering yet more of the country with acre upon acre of sitka spruce is not the way to go about it.

By its nature, forestry is a long-term bet, making it difficult to predict what your investment might eventually be worth. IFS is predicting a very healthy 8.5% return per annum over the 12-year life of its current plan, so that 750 invested today could grow to about 2,000 at maturity in 2018.

The trouble is that we have no way of gauging the accuracy of IFS's projections because they have yet to be tested in practice. Even though the company has been in business for almost a decade, it will be another three and a half years before any of its 14,000 investors begin to see a return on their money. This is because they are locked into fixed investment plans and, while IFS tries to create liquidity by encouraging a grey market in the shares, there is no certain exit route for investors who find that they cannot hang on until maturity.

What it clear is that more recent investors will find it tougher to make money.

This is because a scarcity of suitable land is driving up prices, according to Paul Brosnan, a director of IFS, so that the days of projected returns of 12% a year are long gone.

"The less land we have, the less the rate of return, " he explains.

The land squeeze has forced IFS to change tack.

In the past, investors' money was split equally between bare land that had to be planted from scratch and semi-mature plantations. But the scarcity issue means that the balance has shifted so that as much as 85% of the 2m being raised this time around will be used to buy land that has already been planted.

This could sound alarm bells among investors worried that their money could be used to buy out people who invested in IFS's previous forestry plans. But Brosnan says there is no question of investors' money being used in this way. "All of the plantations will be new to us, " he insists.

Brosnan says there is a ready supply of semimature plantations as farmers and other landowners, who pocketed lucrative EU and local grants to plant trees on their land, decide to sell up when the premiums dry up after 10 to 15 years.

The investment risks are clearly spelled out in the prospectus issued to potential investors. Fire, disease and weather damage are obvious dangers. Investors are also taking a bet on the value of timber in 12 years time, although the prospectus highlights UN predictions that global demand will nearly double by 2050.

Investors must also hope that the government will continue to look favourably on the industry, allowing woodland to hold onto its tax-free status and the generous grants available for planting and maintaining forests.

All the evidence is that investors are more than happy with the risks and that the biggest headache for IFS is too much money chasing too few opportunities. A previous forestry growth plan, launched at the start of May, closed early after raising all of the 2.5m it needed in just three weeks.

People who were disappointed last time now have a second chance and Brosnan says another plan may be launched later in the year.

It is worth remembering, though, that, in common with all property-based investments, forestry is completely unregulated.

The Financial Regulator crawls all over any investment linked to the stock market, but property remains a free-for-all.

This glaring loophole suits nobody, least of all property promoters who would benefit from the cloak of respectability that would come from tighter policing. Yet, if past experience is any guide, it would require another big investment scandal to force the government into action.