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.
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