There are lots of different things that we could potentially invest our money in and art is just one of them. If it is something that you are considering investing in, then there are quite a few things that you need to think about first. It is well worth taking time to think first as rushing in to a decision like this, could be something that you will regret.
Picking a Piece
To start with you have to decide on which piece of art you are going to pick. This can be pretty difficult. If you buy something form a new artist, there is a chance that they may get really famous and their early pieces could become valuable but that is a risk. However, there is an equal risk of buying a painting of a popular artist, which is likely to be more expensive and still may go down in value rather than going up. It is not an easy decision to make and even after a lot of research. It can be very difficult to predict what might happen with regards to trends in the market.
Once you have a painting you will need to store it. You will need to think about where it will go and how it will be protected. You may want to hang it in your home and if this is the case then you may need to fit a burglar alarm to the home so that it is protected form burglars and this will cost money as you will need to have it serviced each year. If you plan on putting it in storage, you will need to find somewhere that has the right temperatures and humidity so that the painting stays in good condition. You will also want to check their protection from thieves and for fire as well.
You will also have to pay to insure the paintings. This will be either a monthly or yearly cost that you will have to pay out. Insurance tends to be high as well because insurance companies will not only cover you for the value of the paintings but also for the cost of finding replacements for them should they be lost. This means that the insurance value tends to be 3x the auction value.
So, if you are considering investing in art you will need to think about it hard. Not only will you be taking a risk when you are choosing a picture to invest in, you will also need to think about storing it and insuring it. There will be these ongoing costs that you will have to find the money to pay for. You will also need to think about the costs that you will have when you sell the art. If you auction it, the auctioneer will take a cut and you may have to pay capital gains tax if the value does go up a lot.
Many people advise those that are looking to invest in art to buy things that they like themselves. This means that they can hang it I their home and enjoy it and they will be able to get value from it that way. Then if they find that they cannot make money from it, either because it has not gone up in value or it has gone down in value, they will still feel that the purchase was worthwhile, because they have been able to get a lot of pleasure from it themselves. It is so hard to predict what people might like or dislike even a few years into the future and tastes change and people go off things and then might like is again in the future and so it can be very tricky indeed.