There are many people who love art and this love of art can certainly be an ideal investment opportunity. However, it is important to remember that art investment is not a “get rich quick” scheme. In some cases, it can take several years, or even a decade before art investors will see a return on their investment. For those who get into art investment, there is often a substantial return. Before choosing to invest in art, it is highly recommended that interested parties educate themselves about the basics of investing in art.
Why Invest in Art?
Before even getting into an investment strategy, you may be wondering why someone would invest in art in the first place. One reason that people will invest in art is that they get a lot of personal satisfaction from art investment, especially when values of the art rise. Another reason that people will invest in art is because they enjoy having something beautiful on display in their home or office. Investors will also choose to invest in art because they know that art often doesn’t depreciate. In fact, it isn’t unusual for 100% return or more according to experts like Phillip Hoffman. It is also a long term investment and hands off investment. Investors buy art, and then wait. There is nothing else to worry about with art investment.
How to Begin Investing in Art
Most people know the basics of investment and as with any investment, when investing in art, you should buy as low as possible and only sell when you can make a profit. Most serious art investors will look for an increase on their investment of about eight to 10 percent of the purchase price. How does one get to that point, however?
One strategy that people will use is to buy their art from an antique shop. Beginners often believe that this is a great method, but in truth, most antique art won’t be in the best condition. Though there is always the possibility that you will find a hidden gem, the odds are not in your favor in most cases.
For those who have several thousand to invest with, another option is to contact galleries or to buy directly from museums or institutions like universities. However, these are going to be higher end pieces, many valued well over $100,000. Most people getting into art investment will want to start smaller.
Private dealers are also an option as are estates. You also may have good luck at an art auction. With an auction, you will find that there are a number of pieces available at a range of different prices. This means that no matter what type of art investor you are or how much money you have to invest, you can almost always find something right for you. In most cases, the resell value of the art purchased at auction is higher than other art, and you can certainly find art at auction cheaper than at retail prices.
What Type of Art Should Investors Focus On?
In order to make a good investment, you have to make sure that you are making the right choice. Some art is simply a better investment than other art. For instance, a report from the Wall Street Journal shows that over the past several years, contemporary art has fallen in value but growth is still occurring. Investors are looking at this as a longer term investment, perhaps even longer than a decade or more. Big name artists, of course, are always worth the investment. Take “Marilyn Monroe” from Andy Warhol, for instance. This piece, when released in 1967 was issued for $350 according to Collins & Kent. In 2010, the estimated worth of this piece was $400,000. By doing some market research, you will easily be able to find what is selling now and what is expected to sell well in the future.
Knowing the True Value of Your Art
Finally, you will likely want to know how to find the true value of your art. As beginner investors begin to learn more about art investing, you will begin to learn more about the approximate value of art and will even be able to accurately estimate what the true value of your art is.
Though you might get a good idea of what a piece is worth, the value of the art cannot be determined until it is appraised. If you purchase a piece through auction, the art is appraised beforehand, so you might be ahead of the game. If you don’t buy from an auction, you will need to work with an art appraiser. This is the only way to know the true value of your art and what it might be sold for to another buyer.
Investing in art can be a great decision for those who are looking for a positive investment opportunity. Art investment can be rewarding; it can be lucrative and it is easy to get started in art investment. Start today and find out how art investment can work for you.