All across the globe, people are embracing art as an alternative investment. Currently, they are numerous art fairs. From New York to Istanbul to Hong Kong, people are embracing art as a form of investment. If done well art offers excellent capital gains depending on which art piece you get your hands on. For instance, Dmitry Rybolovlev bought Salvator Mundi art piece by Leonardo da Vinci at $ 127.5 million. At that time, he did not know much about Leonardo da Vinci and thought he had overpaid for the art piece depicting Jesus Christ. In November 2017, he sold the art piece at Christie’s for $450.3 million, making the Salvator Mundi one of the world most expensive pieces of art
Are you considering investing in art? Here are 4 significant factors that you need to consider before such a huge investment?
- Do Your Research first
When it comes to buying any art pieces, it is essential to carry out in-depth research. Many people have a problem of just following a particular hype. Doing proper research on a specific piece of art will allow understanding the art, giving you a better insight. Find out the history of the art piece and the artist. For instance, if you desire to buy Andy Warhol prints, it is essential to carry out your research on Andy Warhol. Visit art Museums or local art galleries, understand the many different arts created by Andy Warhol.
- Buy Quality over Quantity
Art Pieces are not like real estate, where the many you increase in returns. On the contrary one, Andy Warhol arts can be valuable than some Andy Warhol prints. Remember, not all pieces done by renowned artists are masterpieces. With proper research, you will be able to determine which art piece is valuable, thus focusing your hard-earned money on that particular investment.
- Understand the Financial Gains
Having art pieces is considered significant investment decisions. Even though certain art pieces increase in value, there is an issue most people do not about, that is the tax. The IRS considers art as collectable accruing a 28 per cent tax rate on gains. Removing all expenses and fees, you will get a net profit of up to 55 to 60 per cent of the sale price. For instance, if you wish to purchase Andy Warhol print Marilyn face portrait for $ 1000 then after five years you decide to sell the art piece for $2000. Remember, 28% of the Andy Warhol Print sale value goes to the IRS.
- Invest in Upcoming Artist
Each new day, a new artist is born. The good news about art from upcoming artists go for a lower price and tend to appreciate depending on the artist. The problem is you never know which emerging artist is going to big. However, the good news is that you will have a great art piece for you to enjoy it even if you never sell the art.