What to do with art whose price may sky rocket but is too costly to store?

Question

My late father was an art buff, what I never expected (and he didn't tell) was that since I moved to live abroad, he had been collecting signed lithographs, drawing, artistic photos and rare books that now, I get to know, are worth US$80000. There are pieces by Takashi Murakami, Banksy and Lichtenstein, just to mention some famous names. The origin of these objects is well documented. He was very organized and kept records of when and how much he paid, as well as certificates of authenticity.

These object have no sentimental value for me. I'm already making arrangements to sell those that have no major chances to appreciate beyond inflation. However, I've been informed by an appraiser that some pieces may sky-rocket in coming years. For which specific pieces it will happen, and exactly when it will happen, it's harder to predict. I would like to keep them as an asset (Note: I'm well established, have no debt and don't need this cash at the moment).

Unfortunately, I often change my country of residence due to work and transporting the collection with me would be too onerous (It needs proper care and pay importation taxes every time I cross borders). Also, the yearly rate to rent a bank vault to store objects of these sizes may in the long run be pricier than the market value they could gain, specially if it takes many years for their value to increase (for instance, I can't predict when the artist will die). Finally, since these are lithographs, but no original paintings, museums aren't that keen in taking them on permanent loan, at least not for now.

Should I "eat my heart" and let these objects go at their current value or are there other safe and inexpensive ways to store them until they have appreciated?

Answer 1

I don't want to sell these objects at the moment since I've been informed by an appraiser they are expected to continue gaining value.

If you have other reasons for keeping them, such as sentimental reasons, then it is a personal decision and no one can reasonably tell you that you should sell them. If that's the only reason to keep them, then yes, you should absolutely sell them at their current value; unless given the opposite situation (having $80000 to invest) you would choose similar assets.

Art typically is a high variance asset class. Most pieces will barely hold their value or decrease in value after inflation, while some lucky ones might appreciate by 500% per year for several years in a row. There are other ways to use your $80000 that provide much more stable returns, so unless $80000 is a pretty small portion of your portfolio (< 5%) it doesn't make much sense for you to keep that much money in art.

It doesn't have to be all or nothing though. Perhaps $80000 is way too much of your net worth to speculate on art appreciation, but maybe $5000 isn't, and maybe a couple items from the collection wouldn't be too much to take with you when you move. You could consider keeping one of the rare books and your favourite of the lithographs for example while selling the rest of the collection.

Answer 2

Should I "eat my heart" and let these objects go at their current value or are there other safe and inexpensive ways to store them until they have appreciated?

This is more of can you take care of the items in inexpensive way. The risk of spending more / damaging the items vs getting the money.

In US one could rent storage for cheaper sums. However the art work needs some maintenance. Depending on the climate, etc ... if proper care is not taken it can damage the collectibles.

If the items are small enough to carry in suitecase, move it with you; else sell it for whatever you can get. If you are away for long period and termites eat away the stuff, you will not have anything at hand.