How To

How to Invest in Art if You’re Not Filthy Rich

For decades, the art world has been the province of the ultra-rich. We’re willing to bet the everyday retail investor considers their access to art collecting limited at best.

While it’s true that many pieces fetch million-dollar sums at galleries and auction houses, investing in art isn’t off-limits to 99%. Today there are more ways for those of us not rolling in dough to get into the art world, like Yieldstreet’s new Art Equity Platform targeted at smaller investors.

For an “exotic” asset, modern art is surprisingly profitable. According to CNBC, contemporary art gave a 14% annual return in the 25 years leading up to December 2020, outpacing the S&P 500’s rate of 9.5% over that time.

How can smaller investors take advantage of those opportunities without a house in the Hamptons? Here are a few ideas.

Find Art Online

Art galleries and auction houses can be a little intimidating to novice collectors, to say the least. But you don’t have to mingle uncomfortably with the nouveau riche to find promising works of art. You just have to open a browser.

Digital art galleries have come into prominence over the last decade. For years, the art world has headed in that direction, especially since 2020. That’s because brick-and-mortar galleries turned to the internet to stay solvent during the coronavirus pandemic.

These online sites offer more than homemade arts and crafts. They include genuine works from acclaimed artists and rising talents. Digital galleries are also more straightforward about pricing practices. After all, many were created to make art more reachable for the common folk who live somewhere other than New York and Paris.

If you’re committed to finding art with a budget below $1,000, check out some of these digital galleries:

  • Artspace
  • Artsy
  • Drawer
  • See You Next Thursday’s Instagram

For those with a little extra to spend on art — but still no house in the Hamptons — try Platform.

Buy from the Artist Personally

Not all artists depend on gallery showings to earn a living. Many of them are firmly independent. They keep online catalogs of their artwork and sell them directly to patrons. 

Staying independent helps artists create communities and generate interest in their work. What’s more, it cuts art gallery commission fees (often as much as 50% of the price) out of the equation, as the artist keeps all of what they earn.

Look for artists who are 100% independent. If they have a website or social media account, feel free to contact them directly to see if they have any new works for sale or in progress. Most artists will sincerely appreciate the interest. Be very discreet about the cost if they don’t list their prices (and never suggest a price of your own).

Make doubly sure the artist is independent and unaffiliated with any galleries. At best, these institutions find it uncouth when art patrons go around them to contact the artist directly. 

Consider Buying Limited Editions

Most high-end art collectors focus squarely on investing in original works, which makes sense. You can never have more than one original sculpture or painting, and it’s always the most valuable version. But it’s not necessarily the only one with value.

Many artists take their original artworks and make a limited number of reproductions — say, 25 to 200. These copies can be lithographs, paintings, etchings, silkscreens, photo prints, or castings. Almost all artists who make limited editions number and sign each print. That means they still carry value, even if it’s not as much as the original.

The smaller the number of copies the artist makes, the more valuable they are. Photographers, in particular, tend to make several copies of their originals. But when they’re reproduced by the artist themselves — rather than slapped on a poster sold at a museum gift shop — they’re still bona fide works of art. 

Store the Art Carefully

If you’ve managed to obtain some dazzling but affordable art, be especially mindful of how you store it. The condition of a work of art directly ties into its present and future value. To keep its pristine shape, you need to protect it from the elements.

For example, original paintings can slowly suffer damage when exposed to excessive light or moisture. So it’s always a good idea to hang your art in a space that doesn’t get much direct sunlight, away from elevated moisture generators like kitchens, bathrooms, and underground basements. And don’t forget the frame.

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