Not everything in your collection will have investment potential and some of it will hold no value to anyone else but you. That’s perfectly fine because in the end it’s your collection and your expression of what’s important to you.
In saying this I do believe that you can still hold true to your convictions while at the same time collecting art in a way that increases your chances of collecting works with higher investment potential. So its not so much what you collect though this is still important, it is more about how you collect it and the process behind selecting the best piece that will not only enhance your collection but also at the same time add growing value over the life of the collection.
Here are a few golden rules that I personally use when choosing artwork for my own collection and have found to be very successful for me over the years.
It’s a very good idea to spend time in as many art galleries as you can, talk to the gallery staff about the artists they have in their gallery, read current art books and auction catalogues so you can familiarize yourself with recurring names of artist that you hear of and get an idea of who seems to be making a name for themself.
You will be amazed at how quickly you can gain knowledge of who is going to have good investment potential. But be very wary of any Art Dealer or Gallery who tries to tell you what they think an artists career is going to do or what their paintings will be worth down the track. There is no crystal ball for this and only history can give you the most accurate indication of what an artist’s future potential might be.
Never be tempted buy in the heat of the moment at an art auction either, as you may end up going further than the work is valued at. Always do your research on previous sales for the same size and subject by that particular artist at auctions over previous years.
I like to sit through an entire auction and record the hammer prices on all the lots and I keep the auction catalogue for future reference should I need to research a particular artists prices.
You should also know what your highest bid will be prior to the auction and allow for buyers premium on top of the hammer price as well as any tax that needs to be paid, a lot of people get caught out at auctions and nearly always don’t end up with as good a deal as they thought they were going to get.
It is generally a lot easier to buy from a gallery for around the same price who are able to do the groundwork for you and then back it up with information and service.
Also, don’t expect to turn around and sell your art purchase next week and pocket a promised profit. While this is possible for very experienced Art Dealers you should generally View your art purchase as a long-term investment seven to ten year’s minimum.
You need to consider what stage an artist is at in his or her career, is it the beginning, the middle or the end? Is there potential for the painting’s value to increase before he or she dies? How has the artist’s work been performing over the past 5 to 10 years? Has there been a steady increase in price and demand for the artists work?
Like everything, investing in art involves a degree of guesswork, as you can never know for sure what will happen. Worst-case scenario, a painting will usually be worth what you paid for it.
Do your own research. Make your own decisions. Remember, while art can be a great investment, that should not necessarily be the driving force behind your purchase. You also need to buy it because you like it or because you have made a connection to the piece. Follow your heart. After all it’s you who will have to live with the chosen piece and not the person trying to sell it to you.
2. Try to buy recognised artists.
This is especially true if they are the next generation (son or daughter) or are closely related to already well-known investment artists. Where possible, it is always best (and often more affordable) to start collecting an artist early in their career.
Keep in mind though that there is no guarantee that a next generation artist’s work will grow in value but I have personally found this principle to be true of my own private art collection.
Next generation artists or artists closely related to already famous artists tend to have a very strong roll on effect of people speculating / collecting their work due to the artists family heritage.
3. If you can, collect major or at least significant works.
I always try to buy an artist early to mid career (this gives the greatest potential for increase in value over the years) and if I can I will wait for an important exhibition of work to become available for purchase and will usually try to acquire a large significant piece. If the artist career soars, you will always be glad you bought a major work.
In other words, buy something that is instantly recognisable. Always avoid images that are out of the ordinary or that the artist is not well known for, especially if you plan on reselling the work years down the track.
This is very important, you can get stuck with a work that may be hard to sell and it could let you down in years to come if your reason for purchase was purely investment based.
People collecting that artists work will generally want the more popular or more recognisable images by the artist and don’t tend to invest in less known or less recognised work by that particular artist. This will also reflect at auction, the less popular work doesn’t tend to bring as higher price as the more synonymous and highly collected work by the same artist.
5. Make sure the image is strong.
This means making sure there is nothing unusual or distracting about the image like a tree right in the middle of the painting or a figure that is out of proportion.
It is possible to select the right body of work / subject matter that is synonymous with artist but with a critical flaw that could make the painting difficult to resell in the future.
Make sure the panting is also free of faults such as foxing / mould, chips of paint missing, crazing, discoloration or cracks that could effect the archival stability of the art work as this will most definitely deter a future buyer.
6. Provenance.
This simply means the place of origin of something. When it comes to reselling or purchasing artwork, you will need to have provenance. Always request documentation from the seller of provenance for an artwork you are planning to buy because it is proof of the art works authenticity and place of origin.
You should always keep good records for you artwork purchases as well, because you will need these records when you decide to resell the work in years to come. Keep your eye out for anything on the back of the artwork that adds to provenance such as receipts or even stickers from auction houses, picture framers or art galleries. These can all help to determine provenance and add increased salability to the artwork.
Conclusion.
While these golden rules for collecting have proven very successful in building my own personal investment art collection, you will need to asses your own situation in regards to what you’re able to afford and exactly what your own personal reasons are for collecting art, whether for investment or simply just for pleasure or maybe even both.
In the end art is about life. Whether you have one or many pieces in your collection, each one is an expression of who you are and what you love. They will become part of your life, the way you live, something you enjoy.
It’s not always about how much a painting is worth, it’s also about the journey the artist endured to create the work, this is what gives each piece its own personality and meaning.
Great art begins deep within an artist’s soul. So when you look at a great painting, you are looking inside the mind of the artist, which is what makes art truly worth appreciating.