What a collectible returns after you have paid to buy, hold and sell it
A watch, artwork, car, wine, whisky cask or other collectible earns less than its price rise, because buying, holding and selling it all cost money. Enter your own costs below and the calculator shows the net gain or loss, the net annualised return, and the yearly price rise the item needs just to break even.
Headline price indices usually follow what items sold for. The cost of buying, insuring, storing, servicing and selling an item sits outside them, and this page adds it back. It is general information from the Luxury assets hub, not investment advice, and it knows nothing about your particular item. The result is only as reliable as the costs you enter, so take them from the dealer's or auction house's published terms, your insurer's quote and your storage provider's price list.
The calculator
Example inputs, not market data. The figures in the boxes are round numbers chosen to show how the calculation works. They are not typical costs, not a price quote and not a forecast. Replace each one with a figure from your own quote.
Assumptions, in plain words
You buy for £10,000. Buying costs are 5% of that (£500) plus £150 paid once, so you pay in £10,650. You hold it for 5 years, paying insurance at 0.5% of its value each year and £100 a year for storage and servicing. You assume the market price changes by 3% a year, so it sells for £11,593. Selling costs 15% of the sale price (£1,739).
Result after all costs
After all costs, over 5 years: a loss of £1,562, which is a loss of 3.0% a year. To break even the item needs a market price rise of 6.1% a year.
- Total paid in
- £10,650
- Price £10,000, buying cost £500, one-off costs £150
- Total holding costs
- £765
- Insurance £265, storage and servicing £500
- Net sale proceeds
- £9,854
- Sale price £11,593 less selling cost £1,739
- Net gain or loss
- -£1,562
- A net loss of £1,562 after all costs
- Net annualised return
- -3.0%
- Market price change before costs: 3.0% a year. Costs take 6.0 percentage points off it
- Annual price rise needed to break even
- 6.1%
- A sale price of £13,450 after 5 years. You assumed 3.0% a year
Formulas used (set out in full below)
Net gain = net sale proceeds - total paid in - total holding costs
Net annualised return r: 0 = -(total paid in) - Σ cost(t) ÷ (1 + r)^t + net sale proceeds ÷ (1 + r)^N, for years t = 1 to N
Break-even rise g: net gain = 0, where market value in year t = purchase price × (1 + g)^t
Figures are rounded to whole currency units, so displayed sums can differ by one unit.
Year by year
| End of year | Market value | Costs paid so far | Net position |
|---|---|---|---|
| 0 (purchase) | £10,000 | £650 | -£2,150 |
| 1 | £10,300 | £800 | -£2,045 |
| 2 | £10,609 | £952 | -£1,934 |
| 3 | £10,927 | £1,105 | -£1,816 |
| 4 | £11,255 | £1,259 | -£1,692 |
| 5 | £11,593 | £1,415 | -£1,562 |
How do you calculate the return on a collectible after costs?
Subtract everything paid to buy, hold and sell the item from what it sells for, then turn the result into a yearly rate on the money paid in. The calculator does this in four steps, and a fifth step finds the annual rate:
- Total paid in = purchase price + (purchase price × buying cost %) + one-off buying costs.
- Total holding costs = for each year, (insurance % × the item's value at the start of that year) + storage and servicing, added up over the holding period.
- Net sale proceeds = sale price × (1 - selling cost %).
- Net gain or loss = net sale proceeds - total paid in - total holding costs.
- Net annualised return is the yearly rate r that solves 0 = -(total paid in) - Σ cost(t) ÷ (1 + r)^t + net sale proceeds ÷ (1 + r)^N, where cost(t) is the holding cost in year t, t runs from 1 to N, and N is the number of years held.
The fifth step is an internal rate of return. It counts the money paid in at the start, each year's holding costs at the end of that year, and the net proceeds in the final year, and the page solves it by repeated trial. A reader can check it by typing the same yearly cash flows into the IRR function of a spreadsheet. If you enter an expected sale price instead of a yearly change, the calculator assumes the market price moved at a steady rate between purchase and sale, which sets the value that insurance is charged on.
What price rise do you need to break even?
The market price has to rise each year by enough to pay back the buying costs, the holding costs and the selling cost before the owner has gained anything. The calculator finds that rate g by solving, for the holding period N: purchase price × (1 + g)^N × (1 - selling cost %) = total paid in + total holding costs.
Without insurance the answer has a closed form: g = ((total paid in + storage and servicing over N years) ÷ (purchase price × (1 - selling cost %)))^(1/N) - 1. Insurance is charged on the item's value, which depends on g, so the calculator solves for it by repeated trial and also shows the sale price that rate implies.
In Unmatched Capital's calculation from the example inputs, which are not market data, the break-even rise is6.1% a year, against the 3.0% a year assumed.
A worked example
Take an item bought for £10,000 with a buying cost of 5% and £150 of one-off costs, insured at 0.5% of its value a year and costing £100 a year to store and service. It is held for 5 years, the market price rises 3% a year, and the selling cost is 15%. These are example inputs, not market data. Unmatched Capital's calculation gives:
- Total paid in: £10,650, made up of the £10,000 price, £500 of buying cost and £150 of one-off costs.
- Total holding costs: £765 over 5 years, of which £265 is insurance and £500 is storage and servicing.
- Sale: the market price reaches £11,593, and after the £1,739 selling cost the net sale proceeds are £9,854.
- Net result: a loss of £1,562, which is a net annualised return of -3.0% a year, even though the market price rose 3% a year.
- Break-even: the market price would have to rise 6.1% a year, to £13,450, for the net gain to reach zero.
What the calculator leaves out
The result covers the costs you enter and nothing else. Four things it does not cover can each change the answer:
- Tax. Tax on a gain, VAT, import duty and any reliefs depend on the item, the country and who owns it, so none is included. The articles below cover the item types where it matters. Take advice from a qualified adviser before acting.
- Currency moves. If the item is priced in a currency other than the one you hold, exchange-rate changes alter the result. The currency selector changes the symbol only.
- Finance costs. Interest on money borrowed to buy, and the return given up by tying money up in the item instead of using it elsewhere, are not counted. The net annualised return is not compared with any alternative.
- The chance the item cannot be sold at the assumed price. The calculator assumes a sale at the price you enter, at the end of the period you enter. Real items can take months to sell, sell for less, fail to sell, or turn out to be fake, damaged or misdescribed. One expected sale price stands in for a range of outcomes.
It also treats every cost as certain and as fixed from year to year, though premiums, fees and storage charges change. Nothing here is investment, tax or legal advice.