You might really love guns, enjoy shooting them, maintaining them, collecting them, but can you turn that hobby into an actual investment that will pay off? Ideally every gun you buy would appreciate and outperform the stock market, but that’s probably not going to be the case. Guns, like any other commodity, can be a good investment if you do it right, and a really, really, really bad idea for the uninformed.
So how do you take your love of guns and turn it into a nest egg for yourself or your heirs? Is it better to take your cash and stuff it under the mattress, or fill a safe full of firearms? Well, it depends.
First, avoid any pretty much any kind of “commemorative” or “limited edition” gun. These guns are gorgeous, often made by major manufacturers, and made in fairly small numbers. Unfortunately, they will never be worth more than you paid for them, and you will probably lose money on them as soon as you buy one. There are exceptions to this rule, some older commemoratives with few surviving examples bring some nice money, but adjusted for inflation, they’re worth about the same as what you’d have made if you’d just left the money in the bank.
Like any collectible, knowing your subject matter is important. Don’t just blindly run in with a fistful of cash and buy guns. Knowing the nuances of certain guns can make the difference between a $1,000 gun and a $10,000 gun. Spend time researching and understanding what types of guns you’re interested in. It’s better to spend a little time researching before a purchase than learning after the fact that you made a costly mistake.
Also like any other collectible, condition is everything. Buy the best that you can afford if you’re looking for investment grade firearms. A near new Luger is always going to command a huge premium over a run of the mill, mismatched shooter grade. Buy the best, and you can set your own prices in some cases!
Buy what you like. No matter how much you think that maybe someday a certain kind of gun might become valuable, if you have no interest in owning it, what’s the point of having it? Buy guns that interest you and that you will get some enjoyment out of maintaining, collecting, shooting, or just owning. Investing isn’t just about making money, it’s about the enjoyment it brings you, and no amount of money can replace that.
Also consider the difficulty in selling your collection once you decide to cash in on your investment. You can’t just sell them on eBay and freely ship them out. Guns are tightly regulated items, usually requiring a licensed dealer, and lots of bureaucratic hoops to jump through, so selling them will require time, effort, and a potential commission to an auction house or dealer if you consign them that way.
The difficulties inherent in selling guns made before 1899 a market for many individuals who want to avoid most of the hassle when they want to sell their guns. These guns are classified as “antique” by the Federal Government, and are thus pretty much unregulated, meaning they can be freely shipped by a private individual to another private individual in the United States. This has led to the phenomena where a gun made in 1898 can be worth substantially more than a gun made in 1899, just because of the ease of selling the earlier model.
The maintenance and storage of firearms is another factor to consider when considering whether or not to invest in guns. Safe storage, a place to ensure they’re not exposed to damp, and regular maintenance are time consuming and cost money. You probably shouldn’t buy a rare M-1 Garand, throw it under the bed, and then pull it out 20 years later expecting it to look like the day you bought it. Like any mechanical device, your guns require maintenance, as well as a potentially expensive gun safe to keep it locked up away from unauthorized use.
Some types of guns are also going to be drastically affected by political considerations causing market fluctuations. “Assault weapons” are a classic example. Whenever the political climate turns to talk of banning them, prices jump, supplies disappear, and panic buying ensues. Then, once the political chatter dies down, the market is flooded and prices return to normal, or even become depressed because there’s a glut on the market. This happened during Donald Trump’s presidency, when the price of AR-15 rifles came crashing down, largely due to a huge overstock in the market.
The corollary to all of this is that there’s always the possibility that guns could become even more tightly controlled, and legislation could be passed (especially at the state level) making gun ownership prohibitively difficult. While probably unlikely, this is always something to consider, especially if your investment is tied up in modern, semi-automatic firearms with high-capacity magazines.
You can certainly enjoy your investment firearms. Treat them well, maintain them, store them safely and securely, and there’s no reason they won’t appreciate if you picked the right guns. On the other hand, if you want to customize them to your own particular uses (for something like 3-gun matches, or specific hunting needs), don’t expect to recoup that investment. When you customize your gun, you’re making it useful to you, and probably cutting its usefulness to the majority of other shooters. Never expect to get the full value of any personalized modifications you made to a firearm.
A final incredibly important aspect of any investment in guns is that it’s the only investment that you can use to protect your investment. Even a hundred-year-old pistol, well maintained, can protect your life in an emergency. The same can’t be said for coins, bullion, or money in the bank. That investment isn’t just a monetary one, with guns, its an investment that can save your life.
With all the above in mind, guns really can be a great investment. If you buy smart, know what you’re getting into, store them right, and take good care of them, you will have an investment that will not only appreciate and be a source of enjoyment, but in an emergency it can also save your life.