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Sir TophamHatt

Buying Models for Investment - Good or Bad?

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I buy most of my models to run.

 

With Hornby's 2020 range just being announced, I wonder how many people would look at buying the APT, purely to sell on for profit at a later date.

 

I have only ever purchased two locos (Thomas the Tank Anniversary Edition) for investment, but that is more gifting rather than straight selling for moolah.  I guess it would depend on the price someone is willing to pay :P

 

Can't decide if it's a good thing and I'm sure some people have stories of buying for re-sale, then the re-sale value drops to below the retail price anyway!

 

I'm inclined to think it's a bad thing really as it means those who want the models to run may not be able to get hold of them.

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Posted (edited)

When I was working and had more disposable outcome, I did tend to buy two locos or items of stock, one to run and one as an investment towards my retirement. I really would have done better putting my money in other areas.....:D

 

I sold most of the stock I didn't need a few years ago with mixed results. Most went for around 70% - 90% of what I had paid, purely and simply because prices had increased overall in the market place. I did buy a Hornby Live Steam Mallard which sat unopened for many years and eventually sold it a couple of years ago for a £100 less that I had paid.

 

There were however some items that did increase, again because the retail price shot up dramatically. Hornby Gresley teak coaches were around £22 when I bought them and they nearly all went for over £40. Overall, I may have broke even or made a small loss, but that was over a time period of around 15 years from buying to selling and I had to store the stuff as well....;)

 

As I said, you may get lucky with certain items, but as someone once said, "if you want to make a small fortune from model railways, start with a big one".

Edited by gordon s
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If you want a return you need to find models that no-one else is buying. Those are the ones the collectors will be spending big money on in future. Buy an APT and when you sell there will be dozens of never opened ones on sale at the same time. Check the old Hornby APT on eBay and you'll always have half a dozen to chose from with a new lot appearing every week.

 

Never buy anything marketed as "collectable" such as diecasts. They are good for loft insulation and nothing else as there are so many of the things kicking around for pennies.

 

I'm sure there are models worth buying as an investment, but you'd be better off spending your cash on things you enjoy.

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In general, a bad idea.

 

If you look at the long run, only a very tiny minority of items have even equalled the changes caused by inflation and by variations in typical disposable income, let alone beaten them ....... the things that fetch sums that get people in "loft find" TV shows over-excited tend to be things that were very costly in the terms of the times when they were first made.

 

And, values fluctuate hugely in response to market forces: 1920/30s Hornby 0 gauge went through a "bubble" period in the 1990s, but that bubble deflated with the arrival of modern 'in the spirit of' tinplate, and deflated further in the recession after 2008 before stabilising.

 

Play with 'em!

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I have had a chat with a friend who has bought a large collection of kit built models from an elderly modeller, the ones I have seen are lovely models and have been very well built, however at today's prices he would have been hard pressed to buy both the kits and the parts required to build them, let alone paying someone to build them.

 

I guess that back when they were built the kits and parts were a lot cheaper, but at the end of the day they are only worth what someone is willing to pay for them. One thing I keep hearing about many collectables is that "in the past they were worth a lot more" . I guess its more of a case of preserving their value, limited runs may offer a better return. 

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Posted (edited)

The only time I have made a meaningful profit on a model is when I have managed to buy something secondhand (usually at auction, including eBay) and to sell it on, usually on eBay.  

 

The only potential exception is my two Hornby Clans, which cost me less than £100 each but eBay sellers now ask £200+. 

 

Certainly won't be retiring on the proceeds!

Edited by sjp23480
Typo correction

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Yeah, model railways as an investment, I doubt it.

 I once bought a Hornby 'Exeter' in a wooden box, after a few years, I tried to sell it and maybe got 60% of it's original cost however earlier this year, I spotted how expensive Australian Eureka Models Beyer Garrett had become so I popped mine on eBay, as always with worldwide shipping!

To my surprise, I very nearly doubled my initial outlay, such was its rarity.

 I have also done well on other items but I think the thing is, you have to watch the market and when you spot something you own, going for good money, strike.

You also have to keep your stuff in excellent condition, in a good box and such is a tall order if you wish to also enjoy your investment!

Cheers,

John

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I brought a ModelRail Virgin liveried 90002 when it didn't look like Virgin would allow any more models as an investment and sold it for a slight three figure sum to donate to the purchase of the class 89.

 

I've also considered commissioning a limited run of a loco in a certain livery, it ought to offer a better return than investing elsewhere but the thought of so many trips to the post office and covering liabilities for if something went wrong put me off. 

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I wouldn't consider model railways as an investment.  You might be able to sell something for slightly more than you paid for it, but the value of money is likely to decline over that period that you have set it aside, so no return in 'real' terms.  There is also the risk that a newer model is introduced by another manufacturer, but that's perhaps unlikely with the APT.

 

If I had the cash to invest, I wouldn't choose model railways as the place to put it.

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I well remember a time when Lima Class 60's were going for three figure sums, as soon as the superior Hornby one turned up, like pretty much all Lima now which at one time was branded as "collectable" all of a sudden you couldn't give them away.

 

Quite a few members of the presumably now defunct Lima Collectors Club (yes, there really was one!) must have got seriously burnt!!

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Example:  Many years ago, Lionel trains enthusiasts went through a similar era which encouraged obtaining certain models for investment, retirement, old age. resale profit.  All of which turned to naught and a lot ended up with unsaleable trains as tastes changed and improved models came along.  These folk lost a lot of money as they saw their investment diminish to the point some had literally to give away!

Special models did better as  they were sought after by some or were just the right item for completion of a set, etc.  Possibly the same thing could happen to any collectible though!

      Brian.

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Posted (edited)

As an actual investment - nope!

But, I see all the (relatively few) things I buy as sort of investments - Small trains come out of the same general pocket money fund as beer and all those other things one wastes ££ on  ;) ; so, should I decide to sell some of my small collection of trains off, any possible return on what I spent is one up on the returns from a used gallon of cider!

Edited by LBRJ
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Bloke I knew had a model shop. People would ask his advice on what to invest in model wise. He always pointed them to a rack of cheapo dicasts. 90% or more of which will not survive being played with unlike "colectable" dicasts

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57 minutes ago, laurenceb said:

Bloke I knew had a model shop. People would ask his advice on what to invest in model wise. He always pointed them to a rack of cheapo dicasts. 90% or more of which will not survive being played with unlike "colectable" dicasts

I couldn't agree more. American car collectors have a saying: "The more there were, the less there are" The workaday items that 30 years ago were everywhere, are now gone. Most people know that Mk1 Ford Escorts are now silly money, initially the 2 door saloon, everyone wanted and other variants were mercilessly broken up for parts to the point that there were virtually non existent. This has caused their values to rocket in comparison. My models are bought to use as intended (otherwise why bother putting electric motors in them) I remember a workmate in the 1990s collecting all the limited edition Lima diesels, when he decided to sell, he found that everyone and his dog had done the same thing and struggled to get his money back. I have vintage bicycles and motorcycles, I ride them all, regularly. I remember a complete stranger at a petrol station indignantly telling me: "You shouldn't be thrashing that about! It should be in a museum!" No amount of reasonable argument that I had pulled it out of a hedge and spent three years rebuilding it to perfect running order and if I blew it up, I would rebuild it again made any difference. So my parting shot was: "Would you marry a Hollywood actress and then sleep on the couch every night?"

 

Just my $0.02!

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Posted (edited)

Past! How about buying one of those Bradford FS cuckoo clocks? Bound to be worth heaps 'One Day'!

Edited by kevinlms
Stupid auto correct!
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Or anything advertised as an "Instant collectors item" "Investment quality" or "Heirloom piece" like all that tacky china on the back pages of Sunday supplements or magazine flyers. You will see all of it on the car boot in a year or two where you can buy it for 50p and then invest in an air rifle....

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Unless it really is special..dont bother trying to use Model Railways as an investment for the future.

 

Most items may see a drop in value..one or two may break even but some do make a decent return in investment. Having sold a lot of model railway stuff over the years the items making moat money are very limited editions..like the "Tube Map" Bachmann 66.

 

Anything with a certificate in does not have a guarantee of making a profit.

Baz

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The central difficulty is that it is impossible to predict with certainty what people will want to buy in N years time.

 

Its noticeable that people who have serious money at stake in collectibles, i.e. top-end art and antique dealers, spend an enormous amount of effort ‘making the market’, which is to say artificially, and very cleverly, creating fashions ...... that’s why they talk such a load of hot air and meringue, and spend so much time publicising inflated price expectations.

 

One or two model railway dealers try the same, but that’s for their benefit, not the potential buyer/seller’s.

 

 

 

 

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Oh I don't know, The Rapido APT-E shot up to about double its retail value as soon as deliveries started, and has certainly stayed well in excess since. I bought one mostly because I liked it, but justified it on the grounds that it would be an investment as well. Wish I could have bought two!

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Yes, the Rapido APT-E certainly seems to be holding its own, pricewise, but I'd be loathe to part with mine just to make a couple of hundred quid. Similarly, my Bachmann Blue Pullman. Both superb models that I enjoy owning.

 

I have thinned out my collection considerably in the last few years and virtually everything has gone for around 50-60% of the original purchase price. So no, not worth it as an investment.

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Posted (edited)

I think it very much depends on a) the model and b) whether we are talking about long term or short term investment.

 

Taking b first, i'd argue long term is unlikely to be economically worth it, unless you just get lucky or you have an eye or talent for seeing what will increase in value.  My father has a blue and cream Dinky Nash Rambler, mint in box. The box is mint as well. But it's worthless in the grand scheme of things. However, if he had bought (or been given) the pink and blue coloured version, that would be a different story. Apparently they are like hens teeth. And valued appropriately. I mean which self respecting post war boy would want a pink car? hence it was a very poor seller.

 

In respect of a, short term investments can and do generate worthwhile returns. The obvious example is N Gauge Revolution models, particularly early ones before the market had greater confidence in this "new" supplier/concept.  The initial run of Pendolinos and TEAs did very well on the secondary market. Those who were in on the ground floor benefitted from "early bird" prices, and the knowledge that the models were produced strictly to provide only enough for crowdfund backers. When those who hadn't pre-ordered (some, quite understandably, don't wish to buy sight unseen), saw the finished item and read the favourable reviews it was too late as the models had been produced to order only.  Those who bought for altruistic or investment reasons, realised returns of double (and sometimes more) the original purchase price.  I have a sound fitted Rapido GMD-1 bought entirely off of the proceeds from two Pendolinos I sold in auction, (without ripping anyone off into the bargain, certainly not 200% return!) which I bought to help the project along and because I felt I'd at least get my money back.

 

But it's a gamble and you have to choose carefully, I suppose.

 

EDIT: I've just remembered Rails of Sheffield did a presentation box of Bachman's 10000 and 10001, which I bought with a view to selling on, again short term, but when I came to sell, I only got back what I paid for it (just), which of course I am not complaining about. Maybe I fell into the trap of "collector's Box"..........

 

Best

 

Scott

Edited by scottystitch

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To throw a spanner in the works, I am interested in kit built locos and stock, not everybody's cup of tea but one I enjoy. I am currently in the process of altering the quality of my stock which I might add is for my own pleasure not profit. There are however 3 smaller traders in secondhand items who I keep an eye on, none of the items they sell are new and tend to be quite eclectic in that what they sell varies. I think all 3 buy their stock from either estates sales, or through advertisements.

 

In reality I think this is probably the only way one can make a profit from an investment into model railways. as far as buying a model will appreciate in the future, there are too many factors at play and unlike jewelry or property no underlying value to fall back on 

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There is some money in kits, however it’s the small production runs and ‘closed’ manufactures that will hold value and increase if the prototype isn’t duplicated. The kit has to be a reasonable quality (or perceived to) to have value. I’ve a number of unbuilt Impetus D&S, ABS and backwoods miniatures kits that I know would sell well, even allowing for inflation. If they are duplicated by either contemporary quality kits or RTR, their value will fall through the floor. So not an investment, just lucky market forces.

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Caveat: I model N gauge, so I don't know what the market is like in comparison.


It's a balance between something being worth more because of inflation/price rises, and just being old and obsolete. I'd suggest it's a loose bell curve, where price rises for a bit to a peak, then a new model comes out and value falls away very sharply.


I've sold huge amounts of stock at a profit, simply because the prices have risen. Locos actually aren't overly lucrative, but wagons are. Things like Farish's HTAs, JPAs and FIAs were all £15-20 each brand new, and often less second hand (at the time), but regularly fetch 2-3 times that now either because they're scarce, or the new retail prices are far higher (£80 in the case of the FIAs). That's not to say I envisage that carrying on indefinitely, because at some point they'll be superseeded and/or will fall out of favour. I'm happy to admit I've bought entire collections from people and then sold them in as individual lots where the original owner hasn't fancied it. I've made several thousands pounds of profit over the years. One or two things have lingered a bit.


I've had one or two bizarre things that have gone crazy - Dapol FGW buffets were going for £150 at one point, I was happy to relinquish one. 


I'd not buy models "as an investment to put toward my retirement", becuase I figure by the time I get there they'll be worth far less, just becase they'll be old. I'm only 32 though, which I guess has a bearing.

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