The Consequences of Collecting: The 3 Things Collectors Need to Know
Many people through the years have found a vast amount of pleasure in the art of collecting. Collectors find pleasure in gathering things for several reasons. They may simply enjoy the items that they are collecting, have great interest in its origin or craft, or have the idea that in several years the items will have great value. Regardless of what the reason for collecting may be, there are 3 things you need to know when collecting.
1. Acquiring the item is not the only expense involved.
When making a purchase, many people look at the item’s price tag and don’t think about the cost of owning and preserving the item. Once the purchase is made, collectors should consider the cost of storing the items, insurance, preserving, and regular maintenance. If a collector should decide to sell the items, the costs of packing, shipping and possible commissions should also be considered. If an item is not in high demand it could also be difficult to sell or might not sell at all in a soft market.
2. The appraisal value is different from the market value.
When some items are sold they may come with an appraisal. The appraisal provides a guideline for the buyer and seller helping to determine the value/cost of a piece. If the market is soft this might actually not be the case and a true market value appraisal will need to be provided to give the seller a realistic expectation of what their collectible will sell for. The amount that the item can be sold for – the market value, depends on the supply and demand of the item. This can change over time, so make sure that you do your research before you start collecting or selling your items. If the demand is low, it may be best to wait until the demand increases so that more profit can be made, if a profit is what your end goal is.
3. You need to enjoy it while you have it.
If you buy an item with the anticipation to make a lot of money when selling it, you may be rudely awakened, as the market fluctuates regularly. Therefore, it’s best that you collect items that you can enjoy while you have them. Some collectibles that people enjoy while collecting them are antique cars, music records and unique/rare instruments. Enjoying your items can really help you when it’s time to sell your collection and the value of the item isn’t where you thought it’d be. You can write off the value you’ve taken from collecting, and not focus on what you perceived as the value.
If you are managing a collection and need help figuring out how to downsize your home, be sure to reach out to us and we’ll be happy to help you! You can contact us at 240.403.0177. Also, be sure to check out our recent article about online resources you can use to get rid of your stuff.