How to Invest in Art: NEW Step-by-Step Guide

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Investing in fine art sounds sexy and almost a bit posh. 

You’d even expect an art investor to come from the high roller world, the glitz and the glam.

Thanks to modern technology (and the Masterworks art investment platform), people from the not-so-high-roller world (like me) can start investing in multi-million dollar paintings for a very small minimum investment. 

If done correctly, investing in art can earn you some serious returns (we’re talking up to 30%+ where the stock market typically returns between 7% to 10%). 


Keep reading.

Sneak Peek: Best Art Investment Platform 👇

How to Invest in Art: Step-by-Step Guide

Art investing is a 
long-term investment, which has the potential to greatly increase in value with time.

In fact, global art sales in 2020 reached $50.1 billion – so there is a lot of money to be made. 

And in this post, I’m going to show you exactly how to invest in art.

Let’s get started.

How to Invest in Art Step 1 Determine Your Budget

Step #1: Determine Your Budget

Investing in art starts by determining how much you can afford to spend on art. 

Art can be very expensive. 

In fact, the most expensive piece of artwork ever sold was Leonardo da Vinci’s Salvator Mundi, which was sold for $450 million to the Crown Prince of Saudi Arabia back in 2016.

$450.3 million - the most expensive piece of art ever sold


Obviously, the average person will not have the funds to pay for a $450 million art painting. 

The good news is that you can still invest in multi-million dollar paintings (we’re talking anywhere from $1 million to $30 million+), without having to shell out millions of dollars.

Thanks to modern technology and a revolutionary art investing platform called Masterworks, anyone can invest in million-dollar paintings through what is known as fractional investing.

This concept works because Masterworks finds multiple art investors who pool their money together. 

Masterworks is available to anyone. I should note, however, that the Masterworks team does conduct a phone interview before you are officially onboarded as an investor (the interview application is pretty easy and shouldn’t take too much time).

The good news is that with platforms like Masterworks, you don’t need to blow your budget.

While there is no specific minimum investment (the minimum depends on the art that you’re investing in), chances are the art that you’re considering buying will cost you less than if you were to buy a physical piece of art.

What about a physical art purchase?

If you want to buy a physical work of art, you’ll have to be a little more involved. 

Specifically, you’ll want to determine the following costs:

  • Cost to store the artwork
  • Cost of the artwork itself
  • Cost to insure the artwork
  • Cost to maintain the artwork

Below are some typical rules of thumb for how much you should expect to pay for your artwork:

Expense Type General Rule of Thumb

Storage Cost

Typically $5 per square foot to $15 per square foot

Insurance Costs

Annual costs are roughly equal to 1% to 2% of the artwork’s value

Maintenance Costs

Typically conservation costs range between $85 to $250 per hour

As you can see, buying a physical work of art could be pretty expensive, which is why you want to make sure your budget first aligns with the potentially high costs before committing to the artwork itself.

How to Invest in Art Step 2 Do Your Research

Step #2: Do Your Research

The next step to investing in art is doing your research. 

You’ll want to take your time to research the art by:

  • Visiting art galleries
  • Meeting with professionals
  • Going to online art auctions (like Sotheby’s)

Although it might cost you a pretty penny, I would probably meet with a professional and pick their brain to determine which piece of art might be a good catch.

The good news is that if you decide to start investing in art with Masterworks, you don’t need to commit the time, energy, and money when it comes to doing your research.

Masterworks analyzes records from 1 million+ art auctions to determine the artists with the highest return potential 

Masterworks also stores its purchased artwork in a secure facility with museum-like conditions (we’re talking humidity and temperature control) in New York. 

So if you want to be an art investor while having others do the work for you, Masterworks may be the best option for you.

How to Invest in Art Step 3 Determine the Artwork’s Cost

Step #3: Determine the Artwork’s Cost

The next step – and arguably the most crucial step to investing in art – is determining the cost of the artwork itself.

The tricky thing with art is that the value of a piece of art is pretty subjective.

I would suggest that whatever amount of money you decide to invest in art, make sure you’d be OK losing that money in a worst-case scenario. 

In other words: Don’t overpay for a piece of art. Stick to your budget.

Here are 3 ways to easily determine an artwork’s value:

  • Browse online auctions 
  • Have a professional art appraiser join you
  • Use Smartify or the Magnus art app – Snap a picture of a painting and the app can help you identify and price the painting

Of course, these steps will only apply to you, if you’re planning to buy a physical piece of art. 

With art investing platforms like Masterworks, you can buy fractional shares of a painting in $20 increments and you won’t have to worry about shelling out millions.

How to Invest in Art Step 4 Determine Where to Buy the Artwork

Step #4: Determine Where to Buy the Artwork

The next step to start investing in art is figuring out where you want to buy your artwork. 

And believe me, there are so many different channels and platforms that you can choose from – so the number of options you have can be pretty overwhelming. 

Here’s a list of some of the most popular art investing platforms:

Platform Who Should Use It


Beginner art investors who don’t want to spend the time, energy, and money in buying physical art

Art Indices [e.g. Sotheby’s on the NYSE: BID]

Intermediate to advanced investors who want to invest using EFTs or mutual funds and can afford the relatively high buy-in fee of $2,500 to $1 million

Art Flipping

Investors who want to buy old artwork and sell it for a profit

Art NFT Exchanges [OpenSea, Rarible]

High risk, tech-savvy investors who are familiar with the digital, non-fungible token world

Physical Art

Well informed investors who have the money to pay the high upfront cost of buying physical art

As you can see, there are so many options to start investing in art.

The good news is that there is an option for every type of investor – so if you’re dedicated to investing your money in art, you’ll find your niche platform.

Let’s go into a little more depth:


Best for



Masterworks does the work for you


High fees (around 1.5% per year + 20% when the artwork is sold)

Lock-Up Period

5 to 10 years

Typical Returns

9% to 15% per year

The art investing platform Masterworks is excellent for beginners mainly because the Masterworks team does the work for you. 

They do the art research, they store the painting, and all you do is invest your money for the long run (expect your cash to be locked up for 5 to 10 years).

Art Indices

Best for

Intermediate to Advanced


Trade real-time, like stocks


Steep upfront cost (between $2,500 to $1 million) + management fees = 1% to 3% per year

Lock-Up Period

You decide – a few days to a few years

Typical Returns

8.9% to 20%+ per year

Investing in art indices (which are index funds just focused on the art industry) is a way to invest in art while investing in the stock in the stock market. Technically.

While art indices do reflect the overall health of the art industry, they only highlight the health of art auction prices.

Another key factor to point out is that art indices only reflect the data that’s currently available on those artworks going up for auction, so the art index information isn’t always accurate.

Art Flipping

Best for

Investors who like working with their hands


You get to restore the artwork yourself


Steep upfront cost (varies, depending on the artwork) + restoration cost (varies)

Lock-Up Period

Typically between 5 to 10 years

Typical Returns

0% to 400%+ per year

Art flipping could be a good choice if you’re crafty and skilled when it comes to restoring old pieces of art.

The only downside is that in addition to the money you invest (the upfront purchase costs plus the restoration fees), you’re not guaranteed a higher resell price after you’ve flipped the artwork.

Another factor that you may have going against you is that art flipping is typically not reinforced by the art community. However, if flipped properly, you can see some serious returns.

Art NFT Exchanges

Best for

Advanced, tech-savvy investors


You invest in digital, immutable art using cryptocurrency


Basic fees ($70 to $120+ depending on the platform) + fees for minting a token + fees for selling/buying NFTs + Fees for digital currency conversion + gas fees (fluctuate)

Lock-Up Period

You decide – you can sell when you want

Typical Returns

0% to 1,000%+ per year

Non-fungible token (aka NFT) platforms are becoming very popular and have seen many people become millionaires or hundred-thousandaires virtually overnight by selling digital artwork.

While I’m certainly no NFT expert, I can say that popular NFT exchanges like OpenSea and Rarible make it easy for anyone to buy or sell digital art. 

The art is typically sold using 1 of the 3 primary currencies: Ether, WAX, or Flow, and the transactions are recorded on the blockchain.

However, you should expect to be slapped with many hefty fees when selling (or buying) NFTs, including:

  • Fees for selling
  • Fees for buying
  • Fees for minting a token
  • Conversion fee between digital currencies
  • basic fees (which range between $70 to 120+ depending on the platform)
  • Gas fee – a fee to pay for the computing energy needed to process the NFT transaction on the Ethereum blockchain (gas fees fluctuate depending on the time of the day)

As you can see, there are a plethora of fees associated with NFTs, so if you sell an NFT even for a higher price than you bought one for, you may not make a profit just because of the fees.

Physical Art [Galleries, Auctions, etc.]

Best for

Well informed art enthusiasts (also works for those who are not art enthusiasts but hire an art professional to examine the artwork)


You get to keep the physical artwork


Steep upfront fees (depending on the cost of the actual artwork) + maintenance fees + insurance of artwork + storage costs (if applicable)

Lock-Up Period

You decide – you can sell when you want

Typical Returns

Around 7.6%

The best part about buying physical artwork is that you get to keep the artwork itself.

However, there are some downsides attached to keeping a physical piece of art, which include maintenance costs, storage costs, and even insurance costs.

Typically, buying a physical piece of art is for those who can afford the steep initial price, have a keen eye for good artwork, or have hired a quality professional who has advised to purchase a certain piece of art due to its potential to appreciate in value.

How to Invest in Art Step 5 Buy and Hold

Step #5: Buy and Hold 

Investing in art is all about the long term.

If you are:

  • Patient
  • Long term focused
  • Willing to lock up your money

…Then investing in art could be the right next move for you. 

To make a profit with art on digital platforms like Masterworks, you would need to hold your investment for 5 to 10 years. 

For this exact reason, make sure you’re comfortable locking up a portion of your money for so long before making the initial investment. 

How to Invest in Art Step 6 Sell Your Art

Step #6: Sell Your Art

Of course, the most exciting part of investing in art is 
selling your art!

The ironic thing is that often, people who invest in art intending to sell their artwork in the future actually fail to sell.

In fact, experts estimate that only about 0.5% of paintings bought are ever resold again!

0.5% of paintings bought are ever resold again

Source: Art Basel

If you do decide to resell your artwork, there are several ways you can put your artwork on the market for prospective buyers:

  • Use art galleries
  • Trust a professional
  • Sell your artwork online
  • Consider art auction houses

Just remember that selling your artwork can incur some costs as well – especially if you sell it through an art auction house, which typically takes between 5% to 25% of your sale price. 

The neat thing with the art investment platformMasterworks is that you don’t have to worry about the sale itself – they do the work for you. 

However, in exchange, you’ll also have to pay some high fees, which include 20% of any profits at the sale (much like hedge funds). 

Things to Consider Before Investing in Art

Before you start investing in art, there are some things you should consider first, which I’ve listed below.

5 things to consider before investing in art

Before investing art, you should consider the following:

  • Art is illiquid
  • Art is a long-term investment
  • The art market is unregulated
  • You may have to put your faith in the middle man
  • Art typically should only equal between 5% to 10% of your portfolio

I’d say the most important takeaway from this list is that investing in art could be risky. 

That’s mainly because the art market is not regulated and it’s very difficult to determine the true value of artwork – because it’s subjective. 

Of course, there’s also the risk of the art being destroyed by accident, like by fire, water, regular wear and tear, etc. 

I’m a huge art enthusiast and even though I could easily overspend on art, I know that I need to invest only as much money in art as I am comfortable losing. It’s as simple as that.

That being said, there is, of course, a lot of upside to selling art as well.

When Investing in Art Could be Right for You

Investing in art may not be right for everyone – and that’s perfectly OK. 

Here’s when art investing could be for you: 

  • You are passionate about art
  • You are only investing a small portion of your net worth 
  • You can afford the cost associated with owning a physical artwork

Remember to consider these items to help you better understand whether investing in art is the best next move for you.

Investing in Art: The Do’s & Don’ts 

Investing in art comes down to a fine balance of making a calculated decision of which art investment could yield the highest returns and which art investment speaks to you the most. 

While you can certainly be passionate about art, your decision on which artwork you should purchase should come from your head and not your heart. 

Here is a brief list detailing the Do’s and Don’ts of investing in art:

The Do’s The Don’ts

Start with a small investment and work your way to bigger investments

Don’t settle for a price that’s outside of your range

Focus on the long-term growth

Don’t forget to ask for licenses and other documentation to prove the validity of the artwork before purchasing it

Do your research – lots of it

Don’t forget to insure your artwork

Ask good questions so you receive good answers

Don’t forget to maintain your artwork

Investing in art can be very tedious – but it can also be gratifying, especially once your efforts pay off and you’re able to sell your art investment for a profit. 

Want something easier?

The art investing platform Masterworks gives you the chance to invest in multi-million-dollar art ($1 million to $30 million+) for a fraction of the cost (we’re talking increments of $20 shares), you don’t do any of the work, and you still partake in the profit – if there is one. 

Art Investing: FAQs

Most art experts have hinted that it’s advisable to invest between 5% to 10% of your total net worth in fine art – not more. Remember that if you over concentrate your wealth in 1 specific asset (like fine art), you lack diversification and a good portion of your wealth is tied up in illiquid assets, which is a risk to your overall portfolio. 

However, there is no clear-cut answer to this question. 

Whether you invest 2% of your net worth or whether you invest 12% of your net worth, really depends on your familiarity with art, your willingness to take the risk, and your overall financial situation.

Art is a great investment to diversify your investment holdings. You can buy art through several channels including art auctions, art galleries or you can even invest in shares of expensive artwork ($1 million+) through the online investment platform known as Masterworks.

Typically, you’ll want to invest in art only if you are knowledgeable about the subject.

Here are some simple rules to remember when it comes to investing in art:

  • First, do your research and learn about art and its value
  • Second, locate some artworks you’d like to buy
  • Third, request a professional’s help
  • Fourth, maintain a budget
  • Fifth, buy and hold

Remember that you should not overspend and blow your entire budget just because of an artist’s name. Stick to your budget, don’t be afraid to negotiate the price, and in the worst-case scenario – don’t be afraid to walk away from the deal.

Art could be a good investment. Specifically, fine art is a long-term investment and more stable investment than most other asset classes (like the stock market, real estate, etc.). 

Over the past 27 recessions, the value of a piece of art has decreased on average by around 0.7% (compared to the typical -20% to -50% returns in the stock market).

Art certainly carries steep initial investment costs, but investing in art could still be a good diversifier for your portfolio. 

The good news is that the art market is typically independent of the stock market, so the price of artwork is often much more stable than the price of stocks. 

The bad news is that art does not produce passive income and it’s an illiquid asset that may take some time to sell.

Of course, if you do plan to invest in expensive physical works of art, you’ll need to worry about things like:

  • Insurance costs
  • The unregulated art industry 
  • The high upfront cost of buying art
  • The amount of time it will take to sell the piece of art
  • Real pieces of art may have to be kept in hermetically sealed boxes complete with monitors to ensure the humidity and temperature levels are optimal for the painting

As you can see, a lot of thought goes into whether investing in art is the best fit for your personal situation.

If you’re an average investor – like me – then chances are investing in art could make you some money, but we’re not talking about $100,000’s or millions. 

Investing in art could be a good diversifier to an already well-rounded investment portfolio – but artwork is not a necessity. 

You should only invest in art if you’re comfortable holding on to the artwork for long periods of time, you’re somewhat familiar with the art world, and you’re ok paying the typically high upfront cost of art. 

Closing Thoughts

If you have an eye for art and are a risk-taker, then investing in art may be the right next step for you. 

What I love about investing in art is that you virtually live with your investment every day. Your investment is not just a number in a bank account – it’s a physical piece of craftsmanship.

However, you really should consider investing in art only if you:

  • Paid off your credit card debt
  • Are contributing to your retirement plans
  • Are receiving the employer match for your retirement plan

Unless you’re a seasoned art pro, it takes a lot of time and effort to do your own research and determine which piece of art is the best investment for you. 

That’s why I, a novice art investor, really like the online art investing platform Masterworks, because they do all the work for you, in exchange for a small minimum investment (which beats investing $100,000’s!).

Weigh your options, do your research, and implement your decision.

Your bank accounts will thank me later.

What are your thoughts about art investments? Let me know in the comments below.

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