For those of you interested in collecting art with the intention of selling it on for a profit, the practice can be highly lucrative. However, if you’re looking to make a killing with fine art, then there are a whole load of pitfalls to dodge if you want to avoid becoming the victim.
(Image source: bloomberg.com)
Irish billionaire, John Magnier, purchased the 1917 nude Nu Couche (sur le cote gauche) by Amedeo Modigliani in 2003, for $26.9 million. While that figure may knock the wind out of the average art collector, it pales into insignificance when weighed against the $150 million the piece is set to take when it goes on auction at Sotheby’s in May 2018.
While the example given above may be exceptional, it fits with the trend that art has delivered average annual returns of 8.9% since the turn of the millennium. However, there are a few things to consider if you fancy collecting fine art for profit.
#1 Act Quickly
The modern market is quite different today than it was just 20 years ago. Thanks to the internet, the number of people from all over the world potentially chasing a single piece has increased significantly. This means that one needs to decide very quickly whether to buy a certain piece.
#2 Do Your Homework
Once that piece catches your eye, get your internet enabled device out and start some research. Find out as much as you can about the artist and their previous work – especially when it comes to the sorts of values they are getting at auction and in private sales. Checking which galleries and/or museums the artist’s work has been featured in will also give you an idea of their prestige, which will also affect value and resale demand.
#3 Have a Strategy
Art fairs and auctions can be giddying experiences for the uninitiated. With sometimes upwards of 5,000 pieces on display, it can be tempting to start buying as much as you can as quickly as you can.
It’s far better to plan out what you are looking to get out of the fair or auction ahead of time. Decide where your focus is going to be, and how much you are looking to spend per piece. While taking a gamble on a new face can sometimes yield good results, it’s far better to go for established artists or, if you are going to go for up-and-commers, make sure they’re ones with a healthy dose of publicity around them.
#4 Trust your Gut
If you spot a piece which really makes you feel passionate about it, then don’t be afraid to trust your intuition. Markets can be fickle and it’s always possible that you may be living with a piece for some time before you find a buyer. Therefore, it helps if it’s something which appeals to you personally.
If you want help with making the right choices when it comes to purchasing art for appreciation, then Florian Kappe has the knowledge and passion you need.
Please get in touch today.