{"id":6977,"date":"2024-08-22T16:21:02","date_gmt":"2024-08-22T14:21:02","guid":{"rendered":"https:\/\/moneyhub.ee\/?p=6977"},"modified":"2025-04-22T13:47:11","modified_gmt":"2025-04-22T11:47:11","slug":"art-flipping-alternative-investment","status":"publish","type":"post","link":"https:\/\/moneyhub.ee\/en\/useful\/articles\/art-flipping-alternative-investment\/","title":{"rendered":"Art flipping: How does it work, and is it a good alternative investment?"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"6977\" class=\"elementor elementor-6977\" data-elementor-post-type=\"post\">\n\t\t\t\t<div class=\"elementor-element elementor-element-3f1bbc6e e-flex e-con-boxed e-con e-parent\" data-id=\"3f1bbc6e\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-12a98ed1 elementor-widget elementor-widget-shortcode\" data-id=\"12a98ed1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"shortcode.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t<div class=\"elementor-shortcode\"><nav aria-label=\"breadcrumbs\" class=\"rank-math-breadcrumb\"><p><\/p><\/nav><\/div>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-6558ab4 e-flex e-con-boxed e-con e-parent\" data-id=\"6558ab4\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t<div class=\"elementor-element elementor-element-3190806a ddddf e-flex e-con-boxed e-con e-child\" data-id=\"3190806a\" data-element_type=\"container\" data-e-type=\"container\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-7349e4f1 elementor-widget elementor-widget-heading\" data-id=\"7349e4f1\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Art flipping: How does it work, and is it a good alternative investment?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-4f1504f5 e-flex e-con-boxed e-con e-parent\" data-id=\"4f1504f5\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-260c07f2 elementor-widget elementor-widget-image\" data-id=\"260c07f2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"2240\" height=\"1260\" src=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png\" class=\"attachment-full size-full wp-image-6979\" alt=\"viewing art work to buy\" srcset=\"https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png 2240w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-300x169.png 300w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-1024x576.png 1024w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-768x432.png 768w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-1536x864.png 1536w, https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-2048x1152.png 2048w\" sizes=\"(max-width: 2240px) 100vw, 2240px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t<div class=\"elementor-element elementor-element-24d7d25a e-flex e-con-boxed e-con e-parent\" data-id=\"24d7d25a\" data-element_type=\"container\" data-e-type=\"container\">\n\t\t\t\t\t<div class=\"e-con-inner\">\n\t\t\t\t<div class=\"elementor-element elementor-element-6949b5af elementor-widget elementor-widget-heading\" data-id=\"6949b5af\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Art dealers claim that the number of people flipping artworks has grown immensely in recent years. But is it right to do, and can it turn investors a profit?<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-ef28f22 elementor-widget elementor-widget-text-editor\" data-id=\"ef28f22\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><b>Post summary:<\/b><\/p><ul><li aria-level=\"1\"><b>What is flipping?<\/b><\/li><\/ul><ul><li aria-level=\"1\"><b>Why has art flipping become so attractive?<\/b><\/li><\/ul><ul><li aria-level=\"1\"><b>Why is art flipping causing an uproar?<\/b><\/li><li aria-level=\"1\"><b>Can flipping art be a sound investment strategy?<\/b><\/li><\/ul><p><span style=\"font-weight: 400;\">Art flipping refers to the quick and financially advantageous reselling of under-priced artwork.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Hardly an exclusive tactic reserved for the art world, flipping is a commonly found tactic widely practised in many other markets.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">What is flipping?<\/span><\/h2><p><span style=\"font-weight: 400;\">&#8216;Flipping&#8217; is the practice of <a href=\"https:\/\/moneyhub.ee\/money\/mortgages\/\">buying an asset<\/a> and quickly selling it on the market to make a quick profit.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Some investors buy stocks or bonds, reselling them later at an actual or perceived profit.<\/span><\/p><p><span style=\"font-weight: 400;\">Some traders buy properties in anticipation of reselling them for a higher price; others buy and sell cars similarly. Many individuals even purchase vintage clothing, hoping to make money by selling it on eBay \u2013 with some success.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">The practice of art flipping applies to art.<\/span><\/p><p><span style=\"font-weight: 400;\">But what does this mean?\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Those who buy and sell artwork are simply &#8216;flipping&#8217; it \u2013 which is another word for trading- or that we&#8217;re all long-term investors in paintings that we&#8217;ll invest in for decades?<\/span><\/p><h2><span style=\"font-weight: 400;\">Why is flipping art so attractive to investors?<\/span><\/h2><p><span style=\"font-weight: 400;\">Art dealers claim that people flipping artworks have grown immensely in recent years.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">This makes sense &#8211; the art market is ideal for flipping an item. It&#8217;s much easier to purchase art and profit quickly from a drastically <a href=\"https:\/\/moneyhub.ee\/news\/price-updates\/\">higher selling price<\/a> than with a<a href=\"https:\/\/moneyhub.ee\/insurance\/car-insurance\/\"> car<\/a>.<\/span><\/p><p><span style=\"font-weight: 400;\">Examples of art reselling are found at every market level: artwork sold on eBay or major auction houses.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Art flipping can undoubtedly reap a profit. Jean-Michel Basquiat&#8217;s <\/span><i><span style=\"font-weight: 400;\">Warrior<\/span><\/i><span style=\"font-weight: 400;\"> increased by 450% from 2005 to 2012. By its third selling, <\/span><a href=\"https:\/\/medium.com\/@looklateral\/look-lateral-revolutionizing-fine-art-investment-476912acd116\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">it was worth almost <\/span><b>$9 million<\/b><span style=\"font-weight: 400;\">.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">In 1993, Francis Bacon&#8217;s <\/span><i><span style=\"font-weight: 400;\">Two Studies for Self-Portrait<\/span><\/i><span style=\"font-weight: 400;\"> (1977) sold at Sotheby&#8217;s for \u00a3353,500. In 2015, the painting&#8217;s value increased 4,000 per cent, selling at auction for <\/span><b>$22.4 million<\/b><span style=\"font-weight: 400;\">.<\/span><\/p><p><span style=\"font-weight: 400;\">Jenny Saville&#8217;s <\/span><i><span style=\"font-weight: 400;\">Propped<\/span><\/i><span style=\"font-weight: 400;\"> (1992) is a nude self-portrait painted around Saville&#8217;s graduation from Glasgow School of Art. Soon after, art dealer Charles Saatchi purchased the flesh study painting for $5,248. In the most recent Sotheby&#8217;s London auction, <\/span><i><span style=\"font-weight: 400;\">Propped<\/span><\/i><span style=\"font-weight: 400;\"> sold for $12.4 million.<\/span><\/p><p><span style=\"font-weight: 400;\">As with property and real estate, art flipping doesn&#8217;t always result in a profit. Art dealer and collector Niels Kantor paid $100,000 in 2014 for a Hugh Scott-Douglas abstract canvas with the intent to flip it. <\/span><a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2016-09-19\/that-100-000-painting-bought-to-flip-yours-for-about-20-000\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">Two years later, he sold it for $20,000, an 80% loss.<\/span><\/a><\/p><p><span style=\"font-weight: 400;\">Still, it would appear that profit-making headlines seem to outweigh the potential loss that entices investors.\u00a0<\/span><\/p><h2><span style=\"font-weight: 400;\">Why is the art community in an uproar over flipping art?<\/span><\/h2><p><span style=\"font-weight: 400;\">As we mentioned, investors can &#8216;flip&#8217; anything, from houses to cars to stocks and cryptocurrencies, making profits by buying them at a lower price and holding on to them to sell when they increase in value.<\/span><\/p><p><span style=\"font-weight: 400;\">Within the art world, however, flipping is a dirty word.<\/span><\/p><p><span style=\"font-weight: 400;\">Unlike stocks and houses, most artworks made by working artists rely on sales to support their creative practices.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Artists often work with gallerists, who sell their artworks to institutions and collectors and give them a large portion of the proceeds.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Such private exchanges are considered primary market sales.<\/span><\/p><p><span style=\"font-weight: 400;\">Once a collector decides to put artwork up for auction, it enters the secondary market.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Artists don&#8217;t benefit from any of these sales, except in the few jurisdictions with <\/span><a href=\"https:\/\/www.copyright.gov\/docs\/resaleroyalty\/#:~:text=An%20artist%20resale%20royalty%2C%20or,their%20original%20works%20of%20art.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">resale royalty laws<\/span><\/a><span style=\"font-weight: 400;\">; most of the money goes to the consignors and auction houses.<\/span><\/p><p><span style=\"font-weight: 400;\">Buyers (or investors) rarely do anything to help increase the value of the work. They profit from artists&#8217; continued hard work without paying anything to the artists.<\/span><\/p><p><span style=\"font-weight: 400;\">Of course, if the artist is already established or dead, then flipping art has no consequence.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">It is newer artists that are not gaining the funds needed to support their careers.<\/span><\/p><p><span style=\"font-weight: 400;\">But do investors care?<\/span><\/p><p><span style=\"font-weight: 400;\">But art flipping isn&#8217;t the only motivator for investors. They&#8217;re also motivated by passion, aesthetic appreciation, and a desire for personal fulfilment when collecting art.<\/span><\/p><p><span style=\"font-weight: 400;\">Even younger investors are particularly attracted to contemporary art \u2014 more than 90% of young collectors, defined as those under age 40, are interested in modern pieces.<\/span><\/p><p><span style=\"font-weight: 400;\">High-net-worth millennials are becoming far more active in all parts of the art market. They&#8217;re far more willing to buy art online, for example, <\/span><a href=\"https:\/\/www.adweek.com\/performance-marketing\/influencing-the-art-market-millennial-collectors-social-media-and-ecommerce\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">viewing pieces on platforms including Instagram.<\/span><\/a><\/p><h2><span style=\"font-weight: 400;\">Can art flipping be considered a solid alternative investment?<\/span><\/h2><p><span style=\"font-weight: 400;\">Investing in art is by no means a new idea.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Increasingly, younger investors are now the fastest-growing group investing in art. Not necessarily tens of millions each, but six figures&#8217; art investments are not uncommon in many cases.<\/span><\/p><p><span style=\"font-weight: 400;\">As part of a diverse wealth-building strategy, investing in art can be a great way to accumulate more wealth through alternative investments. It rarely depreciates, and when the time comes to sell, it is often for a profit.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">In 2019, <\/span><a href=\"https:\/\/www.statista.com\/topics\/1119\/art-market\/%23:~:text=The%2520global%2520art%2520market%2520was,39%2520million%2520the%2520previous%2520year.\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">the global art market<\/span><\/a><span style=\"font-weight: 400;\"> was valued at over <\/span><b>$67 billion<\/b><span style=\"font-weight: 400;\">. That is a huge market, and many high-net-worth millennials are getting their share.<\/span><\/p><p><span style=\"font-weight: 400;\">Masterworks, an <\/span><a href=\"https:\/\/www.masterworks.io\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">art flipping platform<\/span><\/a><span style=\"font-weight: 400;\">, states that returns from art ranging over a 3-10 year period can be as high as 32%. Their platform also states that:<\/span><\/p><ul><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Contemporary art annual appreciation is 13.6%<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">S&amp;P Annualised return (with dividends) is 8.9%<\/span><\/li><\/ul><p><span style=\"font-weight: 400;\">As with most investor platforms, investors today do not need to purchase one piece of artwork alone. They can invest in multimillion-dollar paintings as fractional shares, meaning they can also sell their ownership in the artwork in stakes via secondary markets or wait until the whole painting is sold.<\/span><\/p><p><span style=\"font-weight: 400;\">Art flipping, combined with newer technologies like social media and online platforms, means it has become a broader market to sell and buy. You don&#8217;t have to visit local galleries. It is easy to buy art you like online but will have a good resale value.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">When you are ready to sell, you can find a buyer online using one of the many auction sites or sell through secondary markets. Alternatively, you can find a buyer on social media these days.<\/span><\/p><h2><span style=\"font-weight: 400;\">Final thoughts on flipping art<\/span><\/h2><p><span style=\"font-weight: 400;\">When investing in art, you still need to exercise caution. Like all investments, there is a chance of a loss.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Although many art pieces retain value, it is possible the price could drop. Always be mindful of investing only what you can afford.\u00a0<\/span><\/p><p><span style=\"font-weight: 400;\">Sometimes you may also need to be prepared for the artwork to take a while to sell. Art flipping can be an investment for the long-term; only be prepared for the ethical questions on whether it is right to do for emerging artists.<\/span><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Art dealers claim that the number of people flipping artworks has grown immensely in recent years. But is it right to do, and can it turn investors a profit?<\/p>\n","protected":false},"author":3,"featured_media":6979,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"om_disable_all_campaigns":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-6977","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles"],"acf":[],"blog_post_layout_featured_media_urls":{"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-150x150.png",150,150,true],"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png",2240,1260,false]},"categories_names":{"21":{"name":"Articles","link":"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/"}},"tags_names":[],"comments_number":"0","rttpg_featured_image_url":{"full":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png",2240,1260,false],"landscape":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png",2240,1260,false],"portraits":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16.png",2240,1260,false],"thumbnail":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-150x150.png",150,150,true],"medium":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-300x169.png",300,169,true],"large":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-1024x576.png",800,450,true],"1536x1536":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-1536x864.png",1536,864,true],"2048x2048":["https:\/\/moneyhub.ee\/wp-content\/uploads\/2024\/01\/MoneyHub-Special-Reports-Images-16-2048x1152.png",2048,1152,true]},"rttpg_author":{"display_name":"David Bailey","author_link":"https:\/\/moneyhub.ee\/en\/author\/davidbailey\/"},"rttpg_comment":0,"rttpg_category":"<a href=\"https:\/\/moneyhub.ee\/en\/category\/useful\/articles\/\" rel=\"category tag\">Articles<\/a>","rttpg_excerpt":"Art dealers claim that the number of people flipping artworks has grown immensely in recent years. But is it right to do, and can it turn investors a profit?","_links":{"self":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6977","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/comments?post=6977"}],"version-history":[{"count":0,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/posts\/6977\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media\/6979"}],"wp:attachment":[{"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/media?parent=6977"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/categories?post=6977"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/moneyhub.ee\/en\/wp-json\/wp\/v2\/tags?post=6977"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}