An original painting is an artwork which is one-of-a-kind and cannot be replicated. It is unique and authentic, holding a significant value to the artist and investors. The global art market reached 64.1 billion dollars in 2019 according to the report from UBS Global art market and Art Basel. The majority of art work sold was mainly original work of art. The global auction market was valued at 12.8 billion dollars just for paintings and over 17000 paintings were sold.
Investing in original paintings is always a great idea because they give you high financial returns. Original paintings are created by using oil paints, water colour paints, acrylic paints, pastel, or mixed media and it can be made on canvas, paper or other surfaces like stone or wood, etc. The process of creating an original painting is usually time consuming and requires high quality skill and creativity. Therefore, after it is finished and ready, it is a great investment for both the artist and the buyer.
What are the things to consider before investing in art?
Investing in art can be rewarding but you should definitely consider these things before you make a purchase:
1. Market Knowledge
Before investing in an artwork, you should have some knowledge about the market because you may put yourself into a low profit or even loss making deal. You should keep the track of trends and fluctuations in the market and also know about what is in demand and what is not. In 2020, there was a 22% decline from 2019 in global art sales according to the report by USB and Art Market due to the COVID-19 pandemic. Such things should be considered while you study the market.
2. Investment Goals
Be vivid with your investment Goals, what do you want? A long term investment or a short-term flip? Decide your risk-tolerance as well. Over the past 25 years, art investments have outperformed the S&P 500 as per the 2020 Deloitte report.
3. Artist Research
Don't forget to research the artist too. The background, achievements, awards, reputation in the world. Their style and history, also read reviews about them. The world's most expensive living artist is Jeff Koons, who is known for his sculpture 'Rabbit'. His artwork was sold at the highest price of 91.1 million dollars.
You have to be careful while investing in any artwork, make sure you check whether it is authentic or not. You can take help from an art appraiser or dealer. There are many forgeries and replicas in the market, so this step is an essential part of the process. Around 50% of artwork is forged or misrepresented, so be cautious.
What are the benefits of investing in original paintings?
There are plenty of benefits if you choose to invest in original paintings. Such as:
1. Value of Originality
One of the main benefits of investing in original paintings is that they are unique in their own way. There would never be another piece that would look just like it as it holds its uniqueness. Each original painting holds a history with it and a story behind the creation of it. These are one and only in the world and cannot be replicated 100% or reproduced. So, this becomes a precious asset to you. You possess something which is the only one in the whole world.
2. Investing in Art
Investing in original paintings is always a wise idea. A study by Citibank found that the average annual return on art investment is 5.4%, which is more than any other traditional investments like bonds and stocks. The value of art always appreciates over time and so, the value of great quality artwork increases. You will be in the safe zone, so don't stress about it.
When you invest in art, your investment portfolio gets diversified. As art is not correlated to any other asset, its value doesn't fluctuate much compared to the other investments like stocks and bonds. They are highly volatile and art is absolutely not. So, your investment is safe here. You have a constant and high quality result giving asset if you invest in original art. Your portfolio gets protected from inflation.
4. Increase in Value
The value of original artwork always appreciates over time. As the demand for great quality artwork never lessens and increases year by year, the value of the art increases too. So, you can expect a great amount of return on investment on art. The work of some artists has also gone up by 10% every year! Therefore, investing in original painting is even more lucrative.
5. Tax Deduction
When you buy an original painting for a business purpose, you do not have a tax deduction on it, therefore, many art investors prefer buying expensive artwork, so that they can pay less tax and save money. Also, when you donate your painting to a museum or a nonprofit organisation, then you are eligible for a tax deduction based on the painting's fair market value. So, it is like killing two birds with one stone. Your tax is saved or deducted from both ways.
6. Access to High-End Artwork
Fine art investing opens the doors of high-end artwork for you. You develop a connection and you can gain access to private, awesome collections, and exclusive art events too. This gives you the opportunity to view such private collections whicha re not even accessible to the general public and acquire them.
7. Community Involvement
When you invest in original paintings, then you feel a sense of belonging in a community. Investors or collectors who invest in original artworks, promote and encourage the artists to keep up their good work. This helps them financially while maintaining the value of their artwork. Such a sense of community involvement promotes the art and preserves it for the future generations.
Where can you find original paintings for sale?
You can find original paintings for sale in various art galleries, art fairs, or online marketplaces. In their art collection, you would find the paintings of established, famous artists as well as emerging artists in art galleries. In art fairs, you can buy a variety of artwork from various artists in one location. Both are fun places to explore great paintings and choose the ones you like. Online marketplaces like You.Art provide you the leisure of buying paintings from the comfort of your home. These marketplaces provide you the option of filtering the paintings as per artist, style, medium, etc. You can even buy paintings from global artists through such places. It gives you a wider option for selection.
Frequently Asked Questions
Is art a good investment?
Yes, of course, art is a good investment! Investing in original paintings is way more beneficial than your traditional investment portals like stocks and bonds. You get a high ROI over a period of time. This investment is not going to fluctuate and will appreciate over years.
Why should you invest in original paintings?
Investing in original paintings is the best idea as they provide you great results. These are unique pieces and can't be duplicated. Make sure you purchase the original one and not a forged or replica. Because, then it wouldn't be an investment anymore. The value of original paintings appreciates over time, making it a great asset for addition to your portfolio.
Why should you use artist-quality art materials?
When the artist uses artist-quality art materials, then the longevity of your painting is preserved. Artist-quality art materials have great pigmentation and they even enhance the look and feel of your painting. For maintaining the life of your painting, artist should use artist-quality art materials. These are of high-quality which ensure that the colours won't fade away, or deteriorate over time. They also provide a good colour accuracy and wide range of colour options.
Investment in original paintings is always the best idea. This investment will not be risky and give you an increased rate of investment. There are many benefits of investing in original paintings, like tax deduction (the most important), diversification, value of originality, community involvement, and access to high-end artwork. Before you make an investment on artwork, you must consider factors such as artist research, investment Goals, market knowledge, and authenticity. Make an informed decision by consulting your dealer or art appraiser and go ahead start investing in art and build a unique collection of masterpiece art.