A Beginner's Guide to Investing in Art Like a Pro
Owning incredible artworks has become accessible and affordable in recent years, and it's no longer just reserved for gallery owners and oligarchs. More people are starting their own art collection on a budget and creating the perfect gallery walls in their homes as a satisfying way to spend their well-earned cash.
If you can relate, you probably also thought about how you can turn this passion into an investment. A bit of a Google search in ‘art investing’ and you’ll be shocked to learn about the record-breaking sale of Leonardo da Vinci’s ‘Salvator Mundi’ for a staggering US$450 million in 2017, making it the most expensive artwork ever auctioned.
Unlike other home items that depreciate over time, original art is one area that has the potential to see a return on investment. Obviously speaking, it’s highly unlikely a piece of art you buy will one day be worth millions of dollars, but purchasing a work that will not only deliver aesthetic return but financial return, too, is a deal worthy of considering.
However, it’s easier said than done because there’s a lot to consider before investing in pieces that will fetch you a dollar, according to the founder, director and curator of Australia’s leading investment art galleries KAB Gallery, Kerry-Anne Blanket.
With a Bachelor of Visual Arts, two Masters degrees (Hons) from the University of Sydney and an extensive career in art education, Blanket is considered one of the country’s premium art consultants who spends her days educating people about art, and marketing and selling artworks. Bed Threads Journal sat down with Blanket to find out everything there is to know about entering the world of art investment.
How do you know if you should invest in art?
Remember, art is for everyone and if collecting art brings you joy then looking into how you can financially benefit from it should be on your radar. According to Blanket, even buying the smallest of original artworks is considered an investment.
“Original art is the ultimate accessory when decorating your home because it adds a sense of quality and lux to the plainest of rooms, plus it’s a feature, a treasure, and an investment that will stand the test of time,” she says.
How does art investment work?
It’s important to note that a return can present itself in different ways – not just in dollar signs.
“It could be your long-term enjoyment of the artwork you have purchased or the longevity of hanging it for many years compared with more disposable decorative print options. But of course, the return could present itself in a financial return when you later decide to sell the artwork,” Blanket explains.
There are three crucial things you should consider before investing in art.
1. Do your homework
Spend time doing adequate research and exploring different purchase options.
“Investing in your interiors has many positive returns, from maximising the use of a space to personal enjoyment and the potential added monetary value to the home. The wonderful thing about art is that it’s a tangible artefact, which not only adds to the décor but also has the potential to increase in value. Plus, unlike other home improvements, it can come with you if you move house down the track.
“Over time many aspects of your interior décor may date or depreciate, however original art is one item where you can achieve short-term and long-term returns on your investment, which will never go out of style.”
2. Be confident in your taste
It’s crucial you pick a piece that you absolutely love. “You want to invest in something that you’re going to love looking at for years to come,” Blanket says. “There’s no point buying something that is deemed as an “investment piece” if you’re not going to enjoy looking at it.”
3. Work with a gallery
Just like you’d seek help from a personal trainer for fitness purposes or see a dietitian for nutrition advice, you should work with a gallery owner when it comes to artwork.
“To maximise your chances of success, your best bet is to work with a gallery owner to help you source or choose the right piece. Like any expert in their field, a good gallery owner/curator is going should have a really strong hold on the various aspects of the art market, so that you don’t have to! They should know which artists are on the up, how their sales records are tracking, what the re-sale market is doing and so forth.”
If you think purchasing art through a gallery will end up costing you more, it’s actually quite the opposite. “In some cases, it might actually cost you less as they’ll have relationships with the artists and will be able to negotiate a good price,” Blanket notes.
Plus, you also don’t have to limit yourself to prestigious well-established artists to get a solid return on investment from an original artwork.
“For example, at KAB Gallery, we currently hold an artwork from an artist called Andrew Baines, selling for AU$3,600. Two similar pieces in terms of subject, size and quality just sold at auction for $14k and $19k at auction, respectively.” How’s that for some initiative?
5 expert steps to correctly investing in art
1. Ensure your artwork is a quality original
“Avoid digital prints (including giclée prints) because after all, it’s only a copy. It’s the rarity and originality of artworks that provides the value.”
Instead of buying a print you could value the labour and love an artist has poured into a copper etching or crafted screen print. Better yet, aim to purchase an original painting. Great art screams quality and professional artists are committed to quality products. Luxurious paints, custom-made canvases of quality linen and a well-constructed premium frame (if included) all contribute to a quality artwork.
2. Consider your aesthetic taste and art trends
“Interior styles are constantly changing, so you need to look for art that stands the test of time. A few years ago I purchased an artwork for my son’s nursery. I sought the perfect piece that I could admire with him during his early years but also something he can enjoy for many years to come throughout his childhood, teens and adulthood. The colours were somewhat neutral but the artist’s unique skill shines through.
"I did my due diligence and purchased a piece we love and will enjoy in our home forever, while taking comfort knowing the career strengths and international reputation of the artist’s style, subject and career.”
3. You need to LOVE it
“Step back to take an objective look at the artwork you are buying. You should love art, but take a moment to consider who could be investing in your artwork if you hope to sell again in the future. If you’re investing in a quirky piece, you need to consider how it will be received in another five or even 50 years’ time.
"Ask yourself the following: If sold at auction, would there be a lot of bidders willing to fight it out? Is the work versatile enough to suit various hanging spaces and positions?”
4. Investigate the artist’s career
“If you need more of a concrete source of information, look into the artist’s career, reputation and sales history. Consider how their popularity has grown and whether this is reflected in their prices and demand. This gives you an insight into the selling pattern of comparable works and potentially indicates a pattern for possible future returns.
While many art lovers have struck it lucky by investing in an emerging artist who goes onto becoming famous, many others have not."
5. Know there are risks
"With so many options on the art market it can be daunting. It’s important to understand that like all investments there is risk, and like all markets the art market rises and falls over time. If you do your research you can purchase confidently, allowing you to enjoy your art while it’s hanging on your wall and then when the time comes to sell, hopefully realise a return."