Investing in wine is a lot of fun and also a great way to make some money for the future. If you have enough to spare, why not give it a go with the help of these 7 tips.
1. Which Regions?
There are some regions that tend to be more profitable than others. Bordeaux, for example, has an excellent track record if you buy the right vintage.
In previous years Bordeaux has suffered, but the 2015 Bordeaux vintage wine is being hailed amongst wine experts as an exceptional year. You can check out some of the other top wine regions in this guide by Wine Folly.
2. Which Year?
Some regions have real patterns which you can follow in order to see when the best vintages are going to be. In Bordeaux, it’s the “rule of fives”. The 2015 vintage is a very good year, and so was 2010 – and before that, 2005. This means that the next really amazing vintage to come around is expected in 2020.
3. How Long?
Aim to keep your wine for at least five years, if not more, depending on the vintage. The better a vintage is, the more likely it is that the price will soar after that time. This is thanks to the higher and higher percentage of the vintage being consumed, leaving the bottles that are left to become rarer and more desirable.
4. Where?
You should always store your wines in a professional storage facility – don’t try and keep them at home. While it might be tempting to keep them close at hand, you’re just asking for it all to be drunk before you can sell anything, or get damaged. A controlled environment also guarantees the quality of the wine, and some buyers will need you to prove that it has been stored properly before they will agree to a sale.
5. How Much?
If you are looking to invest in wine for the first time, you should have at least £10,000 set aside for the purpose. Why? Because that’s how much it costs to pick up some bottles of a good vintage, store them for five years, insure them, and then put them into a wine auction. If you can’t spare that much money, then now might not be the best time for you to invest.
6. When?
Rather than buying a wine when it is released, you should consider looking at futures, known as en primeur. This is the option to purchase wine when it is still in the barrel, with a little way to go before it is ready. You are making a bet that the particular vintage will be a good one, but with expert opinions available, it’s often a fairly safe bet. It also allows you to get in before everything is snatched up.
7. What?
Wine tax can be quite a complicated issue. The amount you have to pay changes depending on whether you are importing or buying in your own country, where you store it, and so on. You should probably look into getting a tax advisor who will help you out with all of the details so that you don’t have to worry about it or end up with any hefty fines. They will tell you the best actions to take in order to pay the least tax.
One important piece of advice that wine investors should follow is only to invest the money that you can afford to lose. Not only is this prudent for any investment, but it’s also sensible given the fact that you should be waiting at least five years before making any profits.