Art Rental: Generating an Income from Fine Art

Art Rental: Generating an Income from Fine Art

Did you know that there is a way to get a guaranteed and immediate return from art? As art investment becomes more popular and a more widely accepted form of investment, art rental.jpgdifferent 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 signing on the dotted line you 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.

Many people ask me why the corporate sector would 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.

This concept may seem rather complex but it is in fact a very, very good idea which many people have. A number of people have also used their superannuation money to invest in art rental as well but as with any investment you should seek the advice of a financial adviser become making any commitments.

Nick**Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectables for Pleasure and Profit and contributes to many other publications.

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8 Responses

  1. Very interesting article. I own over 20 works of art and am myself interested in renting them, as well as being a broker for others (mainly galleries that don’t provide the service). I live in Latin America (Chile) and this kind of business does not exist here. Where can I get more information about the best practices and lessons learned in engaging in this particular activity?

    • I am an arft investment consultant. Our company rents out a large stock of original signed mixed media. We guarantee our investors 10 percent per annum. Looking to expand into south america maybe we can do business together.

  2. please send me international companies name that compani are take art paintings on rent

  3. I honestly didn’t even know about this concept before. I was just @ an art gallery opening from a person I met through a good friend of mine. I didn’t see anyone asking about a long-term rental agreement, but I see this as a way to spend a fraction of the cost of actually owning pieces of art and still enamor one’s workplace with such pieces. Would it be feasible to think that by having a rental agreement with a gallery for certain pieces that the price of the actual piece be adjusted given the time a specific company rents it out? An example would be if a company decided to rent out pieces of art from a gallery for 2 contracts of 3 years apiece, then purchasing it/them afterwords at 50% of it’s original purchase price?

  4. My business Interactive Arts has just started its own art rental service due to client demand. Find out more at http://www.interactivearts.com.au

  5. I have a very important, very high profile art collection, do you know of any art dealers in Europe which deal with art rental at a very high level?

    thankyou for your help.

    Pierpaolo

  6. Great information, thanks. I often find myself wondering if the market isn’t quickly becoming over-saturated, but from the looks of things there’s plenty to go around.

    rapid income creator

  7. Call (832) RENT ART for Artist Representation in NYC, Boston, and the Northeast.  Fine Art Rentals, Fine Art Gallery.

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