Are you considering investing in wine?
Do you feel that your $40 bottle of wine might soon be worth $400, and would like to invest? How do you know that your product has potential to grow? A single bottle of wine may not be worth the expense; however a case bought from a trusted merchant has better chances to increase in value.
Apart from an investment per se, you have to know more about wine storage. Before spending any money, answer yourself the following question: would you like to invest because you’re a wine lover, or do you want to do it because there are increased changes of a substantial return on investment?
Some people do it for both reasons. But there are high-end investors who are not drinkers. They just want to invest because they have the funds to do it. In the beginning, if your goal is to invest because you know the market and you’re an avid connoisseur, it might be a good idea to pick wines you’re greatly fond of. This way, if your investment doesn’t pay off, at least you have the product and you can drink it if you want.
Proper wine storage is fundamental
Buying wine to drink can easily be stored on a wine rack at home. But if the goal is to buy and sell, you have to store the wine carefully. Otherwise it will spoil and the quality will decrease. The specialists at the Wine Spectator argue that wine bottles stored in inappropriate conditions produces flaky crystals; this happens when the product is exposed to temperatures that are excessively low. In temperature-controlled conditions, this won’t happen.
If the temperature in a room is too hot, then there are chances for the wine to mature faster; it will reach optimum stability and flavor much sooner than anticipated, thus compelling you to sell faster. Buying good wine and selling it too soon decreases your chances to make a sensible profit.
To make sure your wine is stored properly, it might be a good idea to invest in a cellar. A dark area with adequate humidity and temperature levels is the best. If you’re unsure that the area you have available is suitable for storing your wine cases, ask for advice from a wine cellar manager. If you can’t afford to transform a basement into a wine cellar, contact a local wine storage facility. Ask for information on storage price and facility capacity, as well as insurance amount offered in case things go south.
Is it worth ensuring your wine?
It depends. In some circumstances, it might be a good idea to ensure your cases. But if you choose to store your wine in a personal wine cellar, there’s really no way to know your product is safe. Expensive wines are just like high-end jewelry: they’re precious. It’s definitely a good idea to talk to a home insurance company and learn more about how ensure your entire collection.
Wine investors should know that they will have to compare prices, and not decide on the first insurance coverage plan that looks goods. Keep in mind it’s best to consider a deductible amount; basically, the coverage amount has to be linked to the overall value of your wine collection. If your hometown is in an area prone to phenomena such as floods, bad weather, tornadoes or earthquakes, then it’s best to go with an insurance policy that covers both contamination and breakage.
As soon as insurance and storage costs are in place, you have to settle on a budget and decide on an amount you can spend on investing in the actual product. To calculate the budget, the following rules apply:
=> Storage facility upkeep and maintenance
=> Amount of cash you want to spend on wine bottles following deductions for storage and wine insurance costs
Bottom line is, you can’t gain financial freedom with a single bottle of wine. Don’t expect to buy a nice Bordeaux for $100 and sell it for $1,000. If you want your investment to pay off, you have to invest in a case (which can have up to 8 bottles). It doesn’t have to be a really rare and expensive type of wine, but quality must prevail either way.
Author Bio: Steve Brown is the writer to this article. He is a regular contributor at many sites and mainly focuses on business related topics. He also writes for a site http://www.wineinvestment.com offering leading edge service solutions to the fine wine market.