If you had $1,000 to invest in art, what art piece and by which artist would you invest in? How do you determine how quickly it will appreciate? I bet these are/were some of the top mind boggling questions you may have had to answer, or yet to find an answer to.
Imagine this; it is the year 2021 and you just made a decision to build out your personal art collection. You have successfully narrowed it down to what and who you want to invest in. You just spent $2,000 - $1,000 each - on 2 Emmanuel Dudu paintings; let’s call them Art1 and Art2. You are really excited about this purchase but suddenly, you begin to wonder how quickly this piece will appreciate. Now, time travel with me for about three minutes if you may. Firstly, we will go 3 years into the future. You are a bit cash strapped and have an emergency spend to make. You decided to put Art2 up for sale in the market. You are able to get a private collector to pay $7,000 for it. It’s a pretty great deal as you just 7x your initial investment. It is now 4 years later - the year 2028 - and you’re sitting mid row at Patrons contemporary art auction. You put in Art1 painting in the auction because you decided it was time to flip that. In the same auction, you notice from the catalog that Art2 is also up for auction. Art2’s lot estimate is currently $23,000 to $27,000, and Art1’s lot estimate is $11,000 to $14,000. Your senses are raised. Low-key, you are really keen to see how much Art2 sells for. The auction begins, the hammer goes down, and the auction sale for Art1 is a whooping $80,000. You are ecstatic. You just 80x your initial investment! Art2’s auctioning begins. The hammer goes down again but this time, for Art2, and the auction sale is $375,000. It’s all too surreal. You can’t believe what just happened. Art2 just multiplied your initial investment of $1,000 by 375 times! You are well over the moon for your grand slam of $80,000, but you are also having mixed feelings about Art2’s hammer price. You cannot help but wonder; That could have been me! Did I sell too early? Who’s the collector? Why did Art2 sell for more, in comparison to Art1?
Although this is a hypothetical situation, it is not so far off from the possible future reality. Situations like these influence a collector’s decision all the time. There are indices that greatly determine the value of an art piece.
Here are the top four (4) to bear in mind:
Document everything
The story behind the artist, the synopsis associated with the collected art piece, and the history of whose collection the art piece(s) have been a part of overtime, contributes a great deal in its incremental value.
Keep all original receipts and bills of sale. As a serious collector, you want to keep documentation of the work’s provenance. A solid documentation of appraisals are also a value add. All of these help to avoid future frustrations with authenticating your collection’s pieces. Inability to provide a well documented piece of art can have it dismissed and that ultimately diminishes the value of such a piece.
Keep a photographic inventory. This is highly recommended and applicable to large collections usually distributed across multiple locations. This helps to identify and locate each piece in a situation where the handler is unfamiliar with the artwork(s) in question.
Insure and appraise your collection
The first thing to consider post purchase of an art piece is insurance. Insuring your artworks serves as a protection from theft, wear and tear, and sustains its value.
It is also advisable for you to conduct frequent appraisals of your collection. Appraisals are important because they help to determine a fair market value of every piece in your collection. As you appraise your collection, you do want to keep your insurers abreast of the reviewed value so they can update it in their records. Your methods of storage, as well as a successful sale is important information to provide to your insurers.
Condition of the collection
A badly kept collection will hold little value. In every collection, no two works will be the same as it relates to textures, styles, medium, and materials. Wear and tear may happen to them. Preservation efforts for one, may likely differ from the other. Just as you would create a yearly budget for insurance, it is advised to also set aside a budget for maintenance and restorations as needed.
Maintenance and restorations do not always have to be grand. They could be small changes such as in frames and polishing. Do whatever it takes to keep your collection as highly maintained as possible.
Consider Museum Displays
Lending pieces of your art from your collection to a museum for exhibits is a great way to get a quality stamp on them. This not only increases the value of the exhibited pieces, but also your reputation as a collector. Consider this, it is also a great avenue to cut down storage costs.
In some countries, collectors enjoy some tax benefits for displaying some pieces of their collection at Museums. You might want to look this up for your country of residence.
Art Index Top 5 monthly - June 2021
Can you believe this? We’re half way through 2021! It is yet another month of Art Index’s top 5 monthly. Art Index top 5 monthly is a showdown of the top 5 well researched and curated art pieces everyone should want to collect, based on strong technique, message, style, and medium.
Here are our picks for this month of June:
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Until next month,
Keturah Ovio.
Enjoyed the newsletter Keturah! Great job.