Did you know that you can get rental income from Art?

As art investment becomes more popular , different ways of generating returns from investing in art are becoming available. A recent addition to the options available to art investors is art rental which is one of the fastest growing vehicles for investing in art because it solves the problem of illiquidity which is usually associated with art investment by using the artworks to generate an income for the owner.

 Art rental basically involves a gallery or broker selling you a portfolio or piece of art which is then rented out to the corporate sector on your behalf giving you a return which is usually underwritten and usually between 5% and 9% a year for up to 3 years. This means that you can invest in art and get a guaranteed return while you take advantage of the capital appreciation. Once the rental period is over you should get the option of either taking collection of the artworks, selling the artworks, or going back into the rental program and continuing to earn a return.

 The gallery or broker that sells you the work will rent your artwork out to businesses and organisations for them to put in their offices and boardrooms, etc. and will take a small cut of the rental fees they charge them, passing on the rest to you.

 Before agreeing,  should first get any agreements looked over by a lawyer and make sure that the artworks will be fully insured at all times (usually at the expense of the gallery/broker) so that there is no risk to you should anything untoward happen to your artworks while they are being rented out.

 But why would  the corporate sector  rent artworks for their offices rather than buy them, well, there are several reasons. The first reason is that often a company cannot justify purchasing artworks to their board or investors. Secondly, renting artworks allows the company to change the artworks they are displaying every so often without cost to the company and the final reason is that there may be tax breaks involved for the company by renting art.

Professionals Art Thieves ???

In general it's rare for a museum to be robbed by 'professional art thief' . Why?

Because it's very difficult to pull it off!!! First of all,  how to assemble a team of people like guys from Ocean 11...lol... It only happens in movies. Think Thomas Crown....hahha... love that movie!

The Son of Man by René Magritte

Besides even if it can be done, the aftermath publicity makes the stolen items too recognizable & it'll be difficult to get buyers!!! Who would pay so much for something they cant show to others after?

Once the art thief realizes that it's too late, he'll go on to other things while the stolen items lie dormant in some hideaway possibly in a garage or storehouse until he figures out what to do with it....lol.....

Lots of intelligence has been gathered now by the police. For instance they found out that more than 90% of these crimes involves some insider information. So what they usually do is to look for links between past/ present employees & local gangs & criminals. But prevention is always better than cure, so enhanced staff background checks & discreet observation of visitor behavior helps a great deal.

Art Thefts

When one talks about art, one will naturally think of Art Thefts as well. It has been glamorised often by Hollywood. I never forget the first time I saw Thomas Crown Affair. Love the movie. It's smart beautiful but mostly it' s about my favourite subject...lo.....

As it is, in reality, art thieves are not the same ones we see in the movies. Instead they are the usual opportunistic criminals who are often short sighted as well.

E.g the 1961 theft of Goya's Duke of Wellington from the National Gallery in London. Everyone thought some very smart art thieves are responsible for it. The real thief turn out to be a retired cab driver who's pissed at the BBC licensing cost. He stole the painting by entering the museum through bathroom window.

In 1973, C Horsley got arrested for stealing 2 Rembrandts from the Taft Museum. After serving a prison term, he was arrested again & this time for shoplifting toothpaste & sweets!!!!

Investing in Art ????

Art investment is similar to investing in anything else. You want to buy at a price lower than the price you sell it. For most people this isn't the primary reason for purchasing a nice piece of artwork, but if you ever change your opinion about that piece you bought, want something new, or simply need a couple extra bucks, selling your investment could be an alternative.

Art and collectibles trading is subject to the same market pressures as other mediums of investment, but there are some big differences. Subjective factors play a key role in the price. These factors includes condition, authenticity, the visual appeal of the work, and even the people who owned the painting prior to you.

But the best kind of investment is one you want to own. You will know more about it, enjoy having it, and are probably more likely to sell it for a higher price upon sale date.

Real life examples : Picasso's "Boy with a Pipe" sold in 1950 for $30,000 and again in 2004 for $104 million!!!!

Affordable Art fair 2012

Went to the Affordable Art fair at the F1 Pit Building in Marina Bay South 3 sundays ago. Dont know what it is?  Well this is an event, started in LOndon 1999. Founder Will Ramsay started out with the mission to turn ordinary people into an art collector by introducing casing afforable art to the public.

In this fair, there were 2,000 artworks by 850 artists, costing less than $10,000- The overall quality of works at the fair varies.... some were pretty good & very value for money- others were just amateurish & over priced- haha... this I quote from some expert there! Those were mostly ignored by everyone...lol.....

Good Pieces were being snapped up, especially those which are easy to the eye, low priced by unknow artists. People buy pieces that "spoke" to them. After all even if the artist remains unknown, you are still left with something that's beautiful.. That's the whole point right?

We'll never understand the world of maddening auctions with the equally maddening art prices!!!! What would you do with a piece of art that costs millions of dollars? You'll have to insured it, place it in a vault perhaps..... how to enjoy it this way????