Care to start collecting books as an investment? Be smart about it.
From a story on CNBC...
Ask a dealer if books are a wise investment strategy and the short answer is no. Mostly because there’s no liquidity and no fixed prices. Put a three copies of the same book in the same condition for sale at three different auction houses and you’ll likely get three different prices.
The longer answer is a bit more nuanced. John Windle, owner of John Windle Antiquarian Books in San Francisco, says collecting books is more akin to a savings account than a short-term investment.
“Books tend not to lose value over the long haul,” he says. “It’s not a bad place to put money with a reasonable expectation that it will grow. But if you’re looking for something that’s liquid, where one of your kids comes to you and says, ‘Dad, I need money for tuition next week,’ good luck.”
When factoring in a dealer’s markup, which is typically double the purchase price, Windle says collectors should expect to hold books for two seven-year cycles in order to see a significant return on their investment.
“If you buy a book from me at $2,000, for you to get your money back you’re going to have to wait until it’s worth $4,000 and a dealer will pay you $2,000 for it,” he explains. “That cycle is typically about seven years. The first seven years you wait to get your money back. In the next seven years the book may appreciate beyond what you paid for it to a point where a dealer might pay you $3,500 because now he can get $7,000 for it.”
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