Model railroading as a sort of "investment"

Model Railroader General Discussion (Model Railroader)
1

I would like to hear everyone’s opinion on Model railroading as an investment of sorts…

Sure it’s not like the stock market where $300 per month eventually turns into $400,000 in 40 years but I know my wife looks forward to the day where I get bored with it and I sell everything. I personally like rare items so they retain their value fairly well but who knows what they’ll be worth in the long term. I like brass and have several brass items that have increased in value from what I see them going for on ebay. I’ve even got some plastic that is rare and increased in value from what I paid for it when I got it deeply discounted. A associate of mine recently liquidated his brass collection and made about $10k on top of what he paid for it. He did have a large volume of brass worth overall about $160k. Now obviously you’ll probably lose money on scenery and benchwork, etc.

So overall, do you think the hobby is something that can somewhat sustain it’s value or you lose a ton of value? Bad idea as a sort of savings or good idea? I mean I probably will never quit model railroading but the idea that a majority of the original money put in may come back out is possible. Do you think so?

2

A very,very,very very,very…Baaaaaaad Idea. But that’s just my opinion. Sorry, it is probably not what you wanted to hear.[:(]

Brent

3

Let’s evaluate these numbers. $10k on $160k is a 6% profit. If he bought them a year or two ago, that’s not horrible. Much earlier than that, I’m not seeing much of a return on investment. And that’s assuming he didn’t spend money on scenery and benchwork–a total loss.

And as much as there are some modelers willing to pay the big bucks, I hear a lot more on various forums complaining about high prices. Maybe I’d put my money into something where people didn’t complain about the high prices–art?

Ed

4

For such a niche market, I would never bank on it. Generally, from a financial standpoint: With all the $$$ you invest into MRRing, you are going to end up losing money at it. Even the $10K profit on your associate’s $160K brass collection only comes to ~6.25% gain over ??? years.

For me, I got into this hobby for its enjoyment and creativity; not for making $$$.

Tom

5

Model railroading is a hobby and all hobbies are money pits. You can however invest in model trains and make money. But the two are not the same.

6

In the mid 70’s - brass was a good investment. It is not any more. The ‘plastic’ brass has killed a lot of the brass market. A good example is OMI painted MILW bay window cabooses. 10 years ago they sold for $240-260 each. The Walthers model has forced the dumping of the OMI models, and I have seen them for anywhere from $125-150 each on eBay.

Some of the better known ‘Crown’ series have escalated from their original purchase price. I have seen most brass steamers go for about twice the original price. Now if you bought a PFM steamer for $100 in 1970, and it now sells for $200 - you had to wait 40+ years to double your money. That same $100 invested in 1970 will result in more that $200. Some brass engines have kept a high value and have risen - but not a lot. A good IRA will give you better returns. Buy your model trains for your enjoyment - not with the expectation of making a ‘killing’ some day!

Jim

7

A hobby’s “return on investment” is called: Increased Quality of Life!

This true of model railroading, camping, hunting, fishing, even true of golfing greens & caddy fees.

8

If one is thinking about this as a money making idea…bish on that idea…[(-D]

9

My thoughts exactly. I see the investment is in something that can not be measured in dollars and cents, but in my happiness. Or I am blowing all that money at the bar!

As noted above, there are ways to “invest” in the hobby, but that is a hobby unto itself.

10

Very, very bad idea.

If you get in this hobby (or any other for that matter) thinking of it as an investment and a way to increase your wealth then you’re a fool.

period…

Don’t ever buy anything MRR related thinking you’re going to make money from what you buy. Just ain’t gonna happen.

You’d be better spending your money playing the lottery.

11

Sure there are some model railroad items that you could call investments but they are very few and far between.

12

There are at least two undeniable truth’s about any investment.

  1. The success of any investment must be measured against alternative investments and

  2. The value of any investment frequently rises and falls compared to others.

Housing was a pretty good investment until about 2001, then it became a real good investment until about 2007. You know the rest…

Tech stocks were great from about 1990 to March 2001…then again from about 2003 to about September 2008…

Judging by some of the price increases in model products, I’m not sure if we are in a price bubble or if this is a good time to invest, if you’re so inclined. If manufacturers start moving production to Vietnam, like Walmart is with some of their goods, I tend to vote that we are in a bubble.

At any rate, bench work and scenery material is just garbage. I can only see possibly locomotives and possibly structures being good investments over time.

Of course, if a person enjoys collecting and building in the first place, then measuring a return on the investment when you sell the items will vary from person to person.

13

Well said!

As far as monetary value is concerned, I have a nice set of ticket stubs and Olympic programs, collected when I went to Atlanta to watch the Magnificent Seven win the gold medal. To my estate, those are probably going to be worth at least as much as my entire motley collection of well-used brass, cheap RTR and unlikely kitbashes. Layout value? More likely, somebody will have to pay for the use of a dumpster to dispose of it.

Chuck (Modeling Central Japan in September, 1964 - for fun, not as an investment)

14

Nope. As others have said, the investment is in the quality of life this hobby can provide.

Wayne

15

I have never seen anybody who was able to present figures showing that investing in toy/model trains was a good overall, long term investment. Sure some items and a couple of short (2-3yr) time periods have shown a decent return. Problem is: which items and/or time periods to pick.

Collectibles are a fickle market. Look at collectible plates. My mother in law collected these for years, but except for 2 or 3, they all went down in value - most to zero. The couple that went up weren’t enough to break even overall

If you do decide to invest, Lionel is probably your best bet, followed by American Flyer, and some other O gauge toy trains. Brass would be next . After that it’s really up in the air as there is no established collectors market. Lionel and American Flyer price guides are published each year. A Brass book is published periodically. There are people collecting some unbuilt collectible kits such as from FSM.

Keep in mind that NIB (New In Box) and Mint Condition are best. After that, the value falls quickly.

If you do invest:

store them in a climate controlled environment

don’t run them

don’t build kits - don’t even cut the parts off the sprues or punch them out.

don’t paint them

don’t add parts - even Kadee couplers

if the box is factory sealed don’t break the seals

keep the original boxes, instructions, and packing materials

note that there are issues with foam so make sure the foam inserts are not in contact with the model, but do not dispose of or replace the foam

if you must handle them wear gloves such as museum conservators wear.

don’t forget to insure them as your homeowners policy may not cover them.

AND FOR PETE"S SAKE DON"T HAVE ANY FUN WITH THEM.

With luck, selling them yourself, and enough inflation you should be able to recoup your original cost.

Personally I don’t care if mine lose value or

16

Two axioms about the MR hobby:

  1. If you want to make a small fortune in the MR hobby, start with a large one.:

  2. A train layout is a hole in the basement into which money is sunk.

(But have a good time in the process!)

Jim

17

Several guys in our group have helped sell the collections of group members who have passed away. Based on my casual observation of their efforts, and my own purchases from these estates, if a total return of 50% was achieved, that was good.

And that does not allow for the change in the value of the dollar over all the years of buying this stuff. Pay for it in 1969 dollars, 1985 dollars, 1998 dollars and get a 50% return in 2011 or later dollars - that likely averages out to 25%.

Looks like a bad investment to me. I consider every dollar I spend on trains the same as spending money to eat out, go to a show, take a vacation - it is entertainment - g

18

In O gauge three rail the new command control with sound is so much better to many people they don’t even want the old stuff anymore. Also the huge amount and variety now made since they went to China and Korea. Someone said awhile back here that HO is like buying a car. It depreciates as time go’s on. O gauge 3 rail is the same now. I have several locomotives bought in the early 90’s that are selling on eBay now for 1/3 of what I paid. I am cheap and wil not buy any more new engines, thank goodness other people do. There is a tiny nich of Lionel collectors who only buy excellent or better old items and I think their holding there own value wise.

19

Investment?

Yeah,right…

More then likely a investment to the poor house.[:O]

While there are some older brass steam locomotives from the 50/60s that will fetch a nice return on their original cost however, most HO locomotives will fetch a small return on their MSRP on the use market unless the engine or car is extremely rare and hard to find…

20

And as much as there are some modelers willing to pay the big bucks, I hear a lot more on various forums complaining about high prices. Maybe I’d put my money into something where people didn’t complain about the high prices–art?

Ed

There is one strange locomotive that went from $39.95 in early 60s to over $500.00 today and its still a sought after locomotive…

That locomotive is the United Models 2 truck Shay-not sure on the going price of the three truck verison but,suspect its not cheap…