How To Make Good Money Buying And Selling Vintage Guitars
When Aaron Madsen isn't installing garage door openers or recording aspiring musicians in his home studio, he can often be found poking around in pawnshops, looking for guitars.
That's how he scored a beat-up 1974 Fender Stratocaster last October for $400 that he resold a few months later for $1,000. All told, Madsen says, he made $3,500 in recent months buying and selling guitars.
And he hasn't even sold his most valuable pieces, such as the 1968 Gibson Les Paul Custom that's appreciated 750 percent to $8,500 in the five years he's owned it.
"That's something I'm hoping to put my kid through college with," says Madsen, soon to become a first-time father.
The idea of putting a kid through college on a guitar is not as far-fetched as it sounds. The value of guitars - electrics in particular, but acoustics too - is exploding.
Consider: A 1960 Gibson Les Paul, the model played by Led Zeppelin's Jimmy Page, sold for $192,000 in May at a Christie's auction in New York; had it been a year older, it could have fetched $250,000.
A collectors' market
The Vintage Guitar Price Guide, the bible of such matters, indexes a collection of 42 guitars it bought in 1991 for $150,000. Today they're worth $540,000 - almost doubling in the past five years.
The key driver of this sizzling market: baby boomers with spare cash and a yen for the playthings of their youth, especially the sexy guitars played by their idols.
The market is made up of big dealers, big private collectors, newcomers excited about the idea of guitars as investments, and enterprising guys like Madsen. At the high end are those prized Les Pauls, along with 1950s Fender Stratocasters (picture Jimi Hendrix) and Telecasters (Keith Richards), which have soared 50 percent in the past year and command prices in the $40,000 range.
Such high-end guitars have risen in price so rapidly that most investors have been priced out of the market. But the lower end remains a fertile plain of opportunity, and that's where Madsen tends to focus.
He monitors prices on eBay , though he's cautious about buying there. He relies heavily on the Vintage Guitar Price Guide, as well as the Blue Book of Electric Guitars and Gruhn's Guide to Vintage Guitars, which provides feature changes by year.
Such knowledge is crucial in this frothy and hence risky market. As an appraiser of instruments, Stan Jay of Mandolin Bros. in Staten Island, N.Y., says he often delivers "the bad news that a guitar purchased for $40,000 was worth only $4,000." (Here's a tip: Spend the $150 for an appraisal up front.)
A key part of Madsen's strategy is to try to anticipate tomorrow's in-demand guitars. A few years ago, Madsen noticed an upturn in the market for 1970s Fenders, guitars generally frowned upon because of the poor quality of Fender's mass production during that era.
He began scouring pawnshops, music stores, and Craigslist. He picked up three mint-condition Stratocasters - made in 1973, '76, and '79 -for a total of $2,200. Today those guitars could fetch about $6,300.
Madsen is also betting on a rise in the value of 1980s American-made guitars from Jackson and B.C. Rich that were staples of heavy-metal bands like Poison, because the teenage headbangers who couldn't afford them then will soon be able to. "I'm trying to scoop up all the ones I can," Madsen says.
Madsen plays a mean guitar himself, but you don't have to be a picker to mine the six-string boom. Still, it's critical to buy a guitar that sounds good and has a well-preserved neck.
Vintage guitars are functional beauty; they must be authentic and function optimally to increase in value. If you don't have the expertise to buy a good one, get help from someone who does. Otherwise you'll never get near the price in the guides, because a store won't pay top dollar for a guitar that doesn't play easily. And neither will Madsen.
For More Stories Like This One, visit nichegeek.com
That's how he scored a beat-up 1974 Fender Stratocaster last October for $400 that he resold a few months later for $1,000. All told, Madsen says, he made $3,500 in recent months buying and selling guitars.
And he hasn't even sold his most valuable pieces, such as the 1968 Gibson Les Paul Custom that's appreciated 750 percent to $8,500 in the five years he's owned it.
"That's something I'm hoping to put my kid through college with," says Madsen, soon to become a first-time father.
The idea of putting a kid through college on a guitar is not as far-fetched as it sounds. The value of guitars - electrics in particular, but acoustics too - is exploding.
Consider: A 1960 Gibson Les Paul, the model played by Led Zeppelin's Jimmy Page, sold for $192,000 in May at a Christie's auction in New York; had it been a year older, it could have fetched $250,000.
A collectors' market
The Vintage Guitar Price Guide, the bible of such matters, indexes a collection of 42 guitars it bought in 1991 for $150,000. Today they're worth $540,000 - almost doubling in the past five years.
The key driver of this sizzling market: baby boomers with spare cash and a yen for the playthings of their youth, especially the sexy guitars played by their idols.
The market is made up of big dealers, big private collectors, newcomers excited about the idea of guitars as investments, and enterprising guys like Madsen. At the high end are those prized Les Pauls, along with 1950s Fender Stratocasters (picture Jimi Hendrix) and Telecasters (Keith Richards), which have soared 50 percent in the past year and command prices in the $40,000 range.
Such high-end guitars have risen in price so rapidly that most investors have been priced out of the market. But the lower end remains a fertile plain of opportunity, and that's where Madsen tends to focus.
He monitors prices on eBay , though he's cautious about buying there. He relies heavily on the Vintage Guitar Price Guide, as well as the Blue Book of Electric Guitars and Gruhn's Guide to Vintage Guitars, which provides feature changes by year.
Such knowledge is crucial in this frothy and hence risky market. As an appraiser of instruments, Stan Jay of Mandolin Bros. in Staten Island, N.Y., says he often delivers "the bad news that a guitar purchased for $40,000 was worth only $4,000." (Here's a tip: Spend the $150 for an appraisal up front.)
A key part of Madsen's strategy is to try to anticipate tomorrow's in-demand guitars. A few years ago, Madsen noticed an upturn in the market for 1970s Fenders, guitars generally frowned upon because of the poor quality of Fender's mass production during that era.
He began scouring pawnshops, music stores, and Craigslist. He picked up three mint-condition Stratocasters - made in 1973, '76, and '79 -for a total of $2,200. Today those guitars could fetch about $6,300.
Madsen is also betting on a rise in the value of 1980s American-made guitars from Jackson and B.C. Rich that were staples of heavy-metal bands like Poison, because the teenage headbangers who couldn't afford them then will soon be able to. "I'm trying to scoop up all the ones I can," Madsen says.
Madsen plays a mean guitar himself, but you don't have to be a picker to mine the six-string boom. Still, it's critical to buy a guitar that sounds good and has a well-preserved neck.
Vintage guitars are functional beauty; they must be authentic and function optimally to increase in value. If you don't have the expertise to buy a good one, get help from someone who does. Otherwise you'll never get near the price in the guides, because a store won't pay top dollar for a guitar that doesn't play easily. And neither will Madsen.
For More Stories Like This One, visit nichegeek.com
posted by UncommonBusiness at 2:36 AM
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