Antiques – an investment you can sit on

When is an investment not an investment? When it’s also a piece of art or furniture that brings you joy, beautifies your house, and even has a practical use.

Those stocks you monitor with an eagle eye will, admittedly, probably do more to boost the coffers than a Victorian whatnot – but do they have a history that will instil a sense of wonder every time you look at them (if only you could!), or draw sighs of admiration from your friends?

It’s this, rather than the potential for a massive return, that makes antiques such a fascinating investment, says Vanessa Phillips of Strauss & Co. Taking a pragmatic view, she insists that

‘antiques are a store of wealth and not an investment. Antiques do not pay a dividend, they do not bring you rent, and in fact cost you money to look after and insure.’

Why, then, do people insist on spending thousands on curiosities that lack the slick appeal of more modern items? It’s simple, really. As Clyde Terry, owner of Clyde’s on 4th and convenor of a number of antiques fairs, points out, ‘a collection is a labour of love’. The fact that it may develop into an investment is an added bonus.

Predicting which collections may evolve into these golden geese is hardly fail-safe.

Phillips observes that, as with anything, trends and tastes in antiques change. Thus, collectors who purchased the heavy Victorian furniture that attracted attention during the early years of the millennium may find themselves lucky to sell it for half the original purchase price. It’s heartbreaking for those who believed they had made a sound investment, but understandable when you consider the current preference for a Scandinavian-influenced aesthetic.

How do you make sure that you don’t fall into a similar trap? Claire Cobbledick of Gumtree offers some solid advice. For a start, go for rare items. It’s the old premise of supply and demand: the less common something is, the more highly prized it will be. That’s why luxury pieces – especially vintage ones – will probably always fetch a high price. The exception is glassware or other items that are fragile and breakable: although these are obviously massproduced, it’s not often something this delicate is able to stand the test of time. Complete sets of crockery are therefore a good bet, Cobbledick advises. Something else to consider: novelty items – unusual corkscrews or egg coddlers – often strike a chord with collectors. One man’s bizarre is another man’s booty, so if you find a piece that’s maybe a little offbeat, snap it up. If you manage to create a sizeable collection, so much the better.

It stands to reason that items in a good condition fetch higher prices, no matter what their nature. That’s why it’s important not only to purchase from a reputable dealer (one who is a member of the South African Antique Dealers’ Association), but also to make sure that you keep a file on each piece. Terry advises that this file should contain a receipt showing the date and place of purchase, the name of the dealer, and a description of the piece along with its provenance. ‘The Second-Hand Goods Act (Act 6 of 2009) obliges dealers to give extensive descriptions of pieces, and point out any flaws or restoration work. So insist on all these details when you purchase,’ he informs. That said, you need to educate yourself, too: make sure you know what an alteration looks like, because an item that has had parts replaced or which has been altered in any way will have lost significant value. Run your hands over a piece to detect minor flaws that your eye might not be able to pick up. Even repairs can impact the sales price if not done professionally.

‘If you’re purchasing from an auction, ask for a condition report. This description is a guide to what you should pay, and what costs may arise from restoration,’ says Phillips.

There’s something else to know if you’re serious about gaining a return if you choose to sell your furniture, glass and/or art. There’s a big difference between true antiques (anything older than 100 years) and collectables (items with a less entrenched history but which are of great interest to collectors). That’s not to say that collectables are less desirable. If you have an interest in a specific niche, purchase the very best you can afford and maintain the condition as far as possible, you may well find yourself with a very valuable collection indeed. There is a caveat: antiques take time to accrue value, so don’t expect to buy now and reap rewards tomorrow. This is a long game, Terry warns.

This is just one reason why antiques shouldn’t form the basis of your retirement plan. Philip Faure, Head of Cape Regions at Standard Bank Wealth and Investment, says that passion investing (such as collecting antiques) yields the best returns when it is part of a considered, overall long-term wealth management plan. It’s a great add-on to your existing portfolio, but otherwise does not provide adequate diversification, he says.

With this in mind, the last word goes to Phillips: ‘Don’t think of antiques as an investment. Rather, make sure that your money is well spent, and buy what you love.’ Anything else is a lucky windfall – but think of how much you’ll enjoy using the pieces while that windfall accumulates

Not sure how to start your collection?

Clyde Terry offers these tips:

• Educate yourself. When you’ve found a style or period that appeals to you, read up about it, visit museums and galleries, attend auctions. ‘The more you know, the better a collector you’ll be,’ says Terry.
• Understand pricing. Most dealers set prices according to book value, supply and demand, and the rarity of an item. While haggling isn’t encouraged, a little negotiation isn’t out of the question.
• Build a relationship with your dealer.
• When you find something you like, act immediately