How to Invest in Art

Things to know and ask before purchasing made by a living artist.

A properly chosen piece of art can essentially increase the wealth of your investment portfolio significantly over the years and provide enjoyment at the same time.  Art is a great investment that you can physically see, hold, enjoy. It's like real estate in some ways. You make your money the day you buy it. Art can be a life long love affair.

You can invest in the financial market, there traditional commodities such as gold and antiques, stocks  and bonds, there is real estate and you can also consider contemporary art, modern art as in investment for your money. Let's consider paintings by living artists. A painting by a living artist is great way to enter the art investment market. A properly chosen painting can essentially increase the wealth of it's owner depending on your homework in just a few years.

What types of questions should you ask before making a decision to purchase or commission artwork? Why is there a great difference in price for different paintings? How to buy artwork that will eventually rise in price? How does one not to overpay or even underpay for art? What factors influence the cost of a painting? These are some questions you may be asking yourself and the artist before you commit to an art investment.

The difference in price of artworks can be astonishing. For two almost identical works of art and they could be anything from sketches, giclees to acrylic or oil on canvas, located in different galleries or studios with prices ranging from $500 to $15,000 and much much more. How does a collector or art lover make the right choice in a situation like this? Often buyers and art collectors simply don't recognize the factors that price consist of. In one scenario when you know an artist personally and you are buying a painting directly from him or her and the price practically equals the expenses of the painting. This practice has created the long held illusion that the artist should be starving and worthless till death. A lot of these artists can spends hours, days or months on their work and never charge for their time or talent. Many of these artists are hobbyist and not series business persons. Hopefully this case is not very typical for they will surely be out of business, starving and worse before you know it. Artists continue this drawn out process but alas there comes a time to stop and be serious about the art business. If you are stuck in this rut and want to break into the serious and real business of being an artist there are some fantastic books below I suggest reading. If you are buying in this way please suggest kindly to the artist know they are not doing them selves a service and offer extra for their talent. Often artists new to the gallery scene who are very talenet are turned away from galleries because they are not financially viable. In other words they dont charge enough for their talents, work technique. If they arent making any money either will the gallery...and the artist sets the retail price, or should.

When purchasing art, made by a living artist, from a gallery, what are the factors that influence the price? First of all number factor is rent of the gallery space. Location, the city and even the state the gallery is located in can be a contibuting factor in price. The majority of galleries are located in places where low rent is usually not the case. Second, wages, salaries of employees in the gallery who carry out the exhibitions, work in sales, etc. Third is marketing. The Cost of advertising and public relations. Expenses for posters, catalogues, invitations to opening of exhibitions also fall under this. Financing different noncommercial art projects, and many other things another words the cost of doing business for the storefront. Will you will overpay at least twice as much than if you buy a painting from a gallery than directly from the living artist? The answer is no or you should'nt, if you are purchasing from a reputable gallery or buying directly from the artist. The retail price should be the retail price whether buying from the artists studio or the gallery representing them. The price may be a little different however if the artist is represented by more than one gallery. This is rare in the geographical area since it could create pricing problems between galleries. There could be a different reason for price differences too. A gallery may not have a direct business agreement with the artist and has purchased the work at auction, through another gallery or private source and other means. We have all seen the recent news of galleries and reputable museums in trouble for art aquired under mysterious or troubled business dealings. There are actually laws to prevent the artist and their heirs from missing out on this type of financial gain, however they are rarely enforced. It is a good idea to always ask how the gallery or shop acquired the art. Ask if the art is priced on commission or concession. You'll want to buy from a gallery that pays the artist and themselves through commission. A gallery that charges through concession, although art buyers are savy to this and the lingo changes, have basically purchased the art outright at a low price and charge for selling the art within a range and never go below selling it a certain price. They can seem to offer a great deal through negotiation, starting high and eventually agreeing on a price with the customer that is at an inflated price to begin with often many hundreds of a percent above what they paid. Certain commercial galleries have been known to do this. Invest your money smart, ask questions when buying from an exhibition or through an art gallery.

Buying from an art gallery does make sense when you should get a guarantee with your art. For instance if a gallery offers you a painting for $2000, don't expect the artist will to sell the painting to you for $1000. The retail price is the retail price. This is undercutting the gallery who works for the artist and both will either be out of business or parting their ways. The gallery/artist relationship should be a strong one. When you buy an Apple computer or an automobile from Toyota or Ford. Do you go to the factory instead of the dealer and get one for half price? Of course not. They will offer you the works of art that have gone through their selection process that fits their gallery and have a good working relationship with the artist studio. You know for sure it is a good investment. A reputable gallery will also share it's buyer info with the artist through the gallery. They know the artist will not go "around" them to sell. The artist is after all, creating the artwork and the gallery is being paid handsomely to work for the artist and sell their product. That's right you artists out there. The gallery works for you, its not the other way around.

When buying a painting directly from an artist, you know what you like and do so.  The personality and business attributes of professionalism and success that the artist are all determining factors but basically you still know what you like, and that's what everything boils down too. Some buyers are investors who simply collect an artists work based on reputation and market value. They most likely are not reading this article. They are shopping or their assistants are shopping for them.  What kind of qualities do they look for ? What do you consider when buying a painting directly from the artist or studio? Take an interest in his or her art education. Certainly there are some talented self-educated artists, while rare when they are good, they are extremely collectable and profitable. Remember an artist by the name Grandma Moses? She didn't start painting till she was elderly, had no technical skill, yet I bet you are wishing you had an adorable Grandma Moses painting in your possession.

Here are some questions you may want to ask your artist and gallery too. How long have they been painting? Is the body of work they have made more than 20 pieces? 50 pieces? 100 pieces? Is the work consistent?  Another words has the artist created what you consider a masterpiece and can they make another one? Or a hundred other ones? If the artist is a -One Hit Wonder - then they are not so collectable. Does the artist experiment with different styles and are these different styles consistent? Does he or she have any works in large museums? Has the artist won of any art competitions? Have they been in any competitions? This may not be necessary to come across a great artist but it is fun to say - my artist won this or that. Does the artist have an exhibition list? Ask for a biography that will inform you about him or her, along with their artist statement. The artist statement is usually a brief comment by the artist that explains the painting collection and the technique used to create it. Ask the artisan or gallery to show you a catalog, postcards of exhibitions, posters, booklets, books any type of advertising, marketing or PR material that he/she has. Allow the artist to be proud and show you their accomplishment. You will learn a lot. If an artist is published, books, posters, gift items, apparel, and limited editions this is a very good sign of perceptive and savvy businessperson. This artist knows his or her collectors fall into different markets. Do they have a website? Not all talented artists have their own websites. Though less frequent nowadays your artist and gallery will usually have a website or blog. By investigating these things when purchasing artwork, that you desire to rise in price, you will become an informed consumer able to choose artists who have reached certain level of success. When first talking money ask for a price sheet of current works. Asking how much is this and that is gauche.

The most important thing is, beauty really is in the eye of the beholder. Collect the art you love, and love the art you collect.

You can see some of RD's Art work here.