Investing in fine art can be very lucrative. However, many people who have an interest in investing in art nevertheless donít actually do so because, among other reasons, they donít know how to get started.
Luckily, investing in art doesnít need to be nearly as intimidating as it may seem. There are many ways to cultivate a greater understanding of the ways you can go about making money purchasing, saving, and selling various works of art.
One is to understand that investing in art may not be that different from investing in other types of assets. For example, someone whoís already invested in real estate (or at least knows how to do so) can certainly learn a lot about investing in art by looking back on their previous experiences.
Specifically, investing in real estate can teach you to invest in art in the following key ways:
When someone invests in real estate, they often do so with the intention of renting their properties out. This is among the most common ways to make money investing in real estate.
They might get started by using a rent estimate
tool or service to determine how much they can justify charging in rent. This would help them determine whether investing in a particular property is worth their time and money.
Investing in art isnít all that different in this respect. For example, you might not know whether you should purchase a given piece of art because youíre not confident in its value. Hiring an appraiser can help you make a decision in these circumstances.
An appraiser might not just explain how much a piece of art is currently worth. Their expertise can allow them to determine if there will potentially be significant demand for a piece of art in the future.
This is another way
in which investing in art and investing in real estate overlap. Often, fine art enthusiasts enter what amounts to bidding wars, offering more and more money for a piece to ensure someone else doesn't claim it. This also tends to happen when real estate investors acquire high value properties. When they first purchase or invest in them, they may not be that valuable, but an expert could have explained to them that various factors are likely to increase the value of (and thus, competition for) a property in the near future.
Although a property may sometimes lose value unexpectedly, in general, investing in real estate has consistently proven to be a wise decision. Smart real estate investors tend to enjoy high returns-on-investment time after time.
The same appears to be true of those who invest in fine art. While the art market can be volatile, research has shown that the long-term returns
of investing in art may be greater than those of bonds.
Someone who invests in real estate probably studies patterns when making decisions about whether to invest in various properties. They want to be confident theyíre investing at a time and in a context that will optimize their chances of seeing a strong return on their investment.
Itís important to do the same when investing in art. Generally, investing in art can be an effective way to make money over time, but itís still important to study relevant patterns and trends. Luckily, if you invest in real estate, you should already know how to do so.
None of this is meant to be investment advice. You need to conduct thorough research to ensure youíre making smart investments. Itís simply worth noting that, if you know anything about investing in real estate, investing in art shouldnít be that difficult for you.