Fine Wine Vs. Property: Which Is A Better Investment?

Investing in alternative assets like property, gold, or fine wine is a great way to diversify your portfolio and increase your returns. 

However, an alternative investment option like fine wine offers numerous benefits compared to property.

So, let’s explore fine wine vs property investment in detail - the 5 reasons to invest in fine wine instead of property and 5 things to consider while investing in wine. We’ll also show you how Vinovest helps you easily invest in the world’s finest wines.

Top 5 Reasons to Invest in Fine Wine Instead of Property

Here’s why you should consider investing in fine wine instead of property:

1. It’s Easier to Buy and Sell Fine Wine
2. It’s Simpler to Maintain Fine Wine Than Property
3. Fine Wine Performs Well During Times of Economic Uncertainty
4. Fine Wine Is a Low-Risk Investment Option
5. Modern Fine Wine Investment Is Accessible to New and Experienced Investors

1. It’s Easier to Buy and Sell Fine Wine

Buying property is often quite challenging. Usually, you’d need to do some thorough research, make a price agreement with the seller, find a solicitor, and then apply for a mortgage.

Meanwhile, selling your property is also a hassle because you should find an estate agent and a conveyancer. Also, you should ensure that the property is well maintained.

However, investing in the fine wine market isn’t that complicated and doesn’t involve lots of legal and bureaucratic proceedings. Also, you can always find all the information you need through a reputable wine investment platform like Vinovest.

To make things easier, you could invest in a Wine Fund - an option where you invest in international wines and vineyards, and the fund manager handles everything for you.

2. It’s Simpler to Maintain Fine Wine Than Property

If you store your bottle properly in a temperature-controlled wine cellar, you can leave it for years and watch it grow in value! 

And if you don’t have a cellar, you can store your bottle in a professional wine storage facility.

However, property maintenance is quite complicated. For example, you need to regularly renovate the property to ensure it’s always in the best condition. Doing this will cost you a lot of time and money.

3. Fine Wine Performs Well During Times of Economic Uncertainty

Investments usually rarely perform well during uncertain times. However, that’s not the case with wine investing.

Fine wine is known to be a top-performing asset - it even performed well during the 2020 COVID pandemic. For example, the Liv-ex 1000 (the index for fine wine trading) fell by just 4% during the COVID pandemic, while the real estate investment transaction volume fell by 29%.

That’s because wine investing is based on a simple economic model compared to property.

For example, wine prices mainly depend on quality, demand, and supply.

Meanwhile, property investments are quite unpredictable, especially during times of economic uncertainty. This investment model depends on various factors like supply and demand, the state of the economy, government policies, and more.

So, when there’s an economic downturn, there’s often no guarantee that your property investment will grow in value.  

4. Fine Wine Is a Low-Risk Investment Option

A tangible asset like fine wine is one of the best, low-risk investment options. So, it’s worth adding to your investment portfolio.

Once you invest in the finest wines through a reputable company, your bottles are safely stored and protected against theft.

Meanwhile, investing in property can be quite risky. For example, you’ll likely incur unplanned costs depending on your property’s physical condition.

Besides, fine wine prices show a stable appreciation compared to property. According to Credit Suisse (a global investment bank and financial services company), fine wine shows a 3.7% appreciation annually, while property only shows around 2%.

5. Modern Fine Wine Investment Is Accessible to New and Experienced Investors

Fine wine investment is now accessible to any new or experienced investor - thanks to modern fine wine investment platforms. 

As a wine investor, you only need a minimum of $1,000 to invest through platforms like Vinovest.

Meanwhile, investing in property is often not approachable, especially for casual investors. The process usually requires a lot of research and a large sum of money when you get started (usually above $1,000.)

So, if you’re interested in portfolio diversification, an asset class like fine wine is one of the best options to consider.

But, how do you start your wine investment journey?

5 Things to Consider While Investing in Wine

If you’re planning on starting a wine collection, here are a few things to consider:

1. Factors That Determine an Investment Grade Wine
2. Identifying the Best Wines to Invest In
3. Fraud and Provenance
4. Wine Storage
5. Wine Taxes

1. Factors That Determine an Investment Grade Wine

Here are all the factors that determine an investment-worthy wine:

• Wine Critics’ Ratings
• Chateaux Reputation
• Price Appreciation
• Aging Potential
• Production Quantities

But then, what boosts the value of investment-grade wine? 

Simply put, the increasing demand or the growth of the secondary market, and the limited supply boost the value of investment-worthy wines.

2. Identifying the Best Wines to Invest In

Now, if you want to diversify your investment portfolio by adding fine wine, you need to know which bottles to pick.

Usually, most wine collectors buy the best bottles through the secondary market. Now, here are a few bottles that performed well in the fine wine market in 2021:

• The 2016 Domaine Armand Rousseau Pere et Fils Chambertin Clos-de-Beze Grand Cru grew in value by 43% on Liv-ex in November 2021. This investment wine bottle was even a top performer on the platform.
• Also, the 2004 Krug Vintage Brut’s price grew by 11% on Liv-ex, while the 2008 Pol Roger Cuvee Sir Winston Churchill Brut appreciated by 10%.

3. Fraud and Provenance

Before investing in wine, you need to know about its authenticity and provenance. Unless you’re using a reputed platform, you should reach out to a wine expert to avoid investing in a counterfeit bottle.

4. Wine Storage

You need to properly store your investment wine bottle in a wine cellar to retain its value. 

However, it’s best to let a reliable wine investment company securely store your bottle in a bonded warehouse. This way, your wine will be fully covered with insurance and won’t be tampered with.

5. Wine Taxes

There’s no need to worry about taxes when investing in the fine wine market. For example, you won’t be charged any VAT and excise duty when you store your bottles in a bonded warehouse.

Now, let’s discover how you can invest in fine wine bottles.

What Is the Easiest Way to Invest in Fine Wine?

Here are the 5 options for investing in fine wine:

1. Reputable Wine Investment Platforms Like Vinovest
2. Online Auctions or Through a Physical Auction House
3. Specialty Stores
4. Online Wine Exchanges
5. Directly From the Winery (En Primeur)

1. Reputable Wine Investment Platforms Like Vinovest

Vinovest is a reliable wine investment platform that helps you buy, store, and sell investment-worthy Cabernet Sauvignon, Pinot Noir, or Bordeaux wine bottles. It also allows any wine collector to invest in wines from the Napa Valley or any other wine country.

Now, once you create an account with Vinovest, portfolio managers will ensure that you invest in the finest wines. The best part is that your bottles will be stored in a bonded warehouse (that doesn’t charge excise duty or VAT) and will be covered with full insurance.

2. Online Auctions or Through a Physical Auction House

You can also invest in wines through an online wine auction site like WineBid, or through an in-person wine auction facility like the Sotheby’s auction house.

3. Specialty Stores

Specialty wine stores like K&L Wine Merchants also make it easy for you to invest in age-worthy wines. However, these stores might not always have the most sought-after bottles.

4. Online Wine Exchanges

You can also invest in fine wine through online wine exchanges like Liv-ex, Berrys’ Broking Exchange (BBX), or the Vinovest Exchange. 

Vinovest Exchange is a platform that helps you invest in wine the same way you invest in stocks. It helps you buy and sell investment-worthy wines with no minimum balance or portfolio managers - just like the stock market.

5. Directly From the Winery (En Primeur)

You can also invest in wine futures (En Primeur wines) directly from the winery at affordable prices. This will help you secure authentic wines made using the finest grape varieties from the best vineyard sites.

Fine Wine vs Property Investment: Which Option Will You Try?

An alternative investment option like fine wine appears to be a more risk-free and profitable investment option than property.

So, visit the Vinovest website and start building your fine wine collection today! This platform helps you buy, store, and sell investment-grade Cabernet Sauvignon, Pinot Noir, Bordeaux wine bottles like Lafite Rothschild, and other wines.

A wine expert from Vinovest will also help you select extraordinary wines made using the best grape varieties from renowned vineyard sites in Napa Valley or any other wine country.