Almost everyone who knows enough about Persian rugs to ask the question, “Are Persian Rugs a Good Investment?” will usually get a resounding, “Yes!” from their knowledgeable carpet dealer. But is it true? Should you view Persian rugs as an investment? Is there any way to determine what your rug may be worth down the road? In all honesty, most dealers will tell you that trying to figure out if something is an investment boils down to one thing: Will it sell? If people are willing to pay for it, then yes, in a sense it might be considered an investment. However that answer works better with stocks and bonds than with carpets. But that does not make it a bad answer; you can make many kinds of investments in Persian rugs, or in art pieces of all kinds, or in real estate. And just like investing in any other commodity, the value is only set on the open market.
People choose to invest their money in certain things because they believe that over time those items will increase in value, and if they are correct then they stand to gain more than if they had not invested. Since the markets go up and down based on supply and demand (as well as numerous other factors), it is impossible to predict with certainty whether something will indeed increase in value over some time period. However there are certain criteria that an item has to meet before most investors will consider it a sound financial move.
Rising Prices
The first criteria of an investment is the ability to purchase the item at one price and sell it later for more money. In other words, you have to be able to buy low and sell high. Fortunately for Persian rug collectors, this criterion does indeed hold true when it comes to carpet purchases. Most Persian rugs are hundreds of years old, which means that even in poor condition they are valuable because no new ones are being produced that match their age or craftsmanship. Thus every single Persian carpet that has survived can potentially increase in value if cared for properly. It should be noted however that not all carpets will increase in value over time simply because they are antiques. Some antique carpets are still worth more if the wool is rewoven, new silk pile is woven on top, or it can be restored in some other way to make it look better than when originally purchased. This criterion only holds true for Persian rugs which have not been deliberately altered.
Plenty of Demand
The second criteria of an investment is that many people must want to buy it. To invest large amounts of money into anything there needs to be a market for it where you can recoup your initial costs plus earn a profit by selling it. For example, if every single Persian rug that were ever produced were handmade and unique specimens, they would almost certainly never increase in value because no one could find anyone willing to pay more than what they were originally purchased for; thus you could never make a profit. But since Persian rugs are not mass produced, there are always new collectors entering the market who are willing to pay increasing amounts for these carpets.
High Quality Craftsmanship
The third criteria of an investment is that it must meet minimum standards of craftsmanship and/or materials. For example if someone were to look at your Persian rug collection that consisted of only cheap, machine-made rugs, most investors would probably question your financial decision making on two counts. First because not all “Persian” rugs are really made in Persia, which means expensive rugs might actually be less valuable on the open. Second because of the materials involved. High quality Persian rugs are made using the best available materials such as silk and wool, which command a much higher price than cheaper synthetic materials such as rayon.
Is it Really an Investment?
Although “investing” in carpets is quite different from investing in stocks and bonds, there are advantages to purchasing an item that you know will increase in value over time. One of them is peace of mind; you can sleep at night knowing that your money is safe because it’s not being swallowed up by inflation, but earning interest for itself every year instead. Another benefit is liquidity; you have the option of selling off part or all of your collection when circumstances change or if something better comes along that you would rather invest in. Having money just sitting around in a bank account doesn’t do either of these things.
Contact Persia Oriental Rug Gallery
If you’re looking for a great deal on Persian rugs, you’ve come to the right place! We can help you choose a color and a pattern depending on the style of your home or apartment. Give us a call at 508.753.4667 or contact us here for more information.
