Are Grand Pianos a good investment?

Invest in a Grand Piano

Since I am often asked whether Grand Pianos are a good investment especially in a period where everything seems to go up in value as interest rates are zero or even negative with so much money around chasing investments, I am sharing some facts and my thoughts with you.


Imagine your great uncle of 96 years dies and his wife asks you whether you want to have his Steinway A model, which he bought back in 1956 and is a 1926 model made in the Hamburg factory. She tells you you can keep the proceeds if you want to sell it and buy anything else for it. Are you sitting on a small fortune? Maybe if the instrument was tuned and played regularly and the mechanics were overhauled every 20 years or so by a piano technician knowing his trade. But this is seldom the case. What if the instrument was last tuned 20 years ago, was standing near the heating during winter and treated more like a nice looking piece of furniture for great aunt´s tea parties?


In the former case the of the instrument being maintained and tuned and being in excellent shape, and you sold the A model via e.g. eBay to another retail customer, you might get about 25,000 EUR for it. In the latter case (the piano being a piece of furniture standing next to the heating), selling it to a dealer or restorer, you might get 5,000 EUR for it – and more because it is an original Steinway then because it is still a great grand piano - in order to get a good price for it on the used grand piano market, the restorer will have to invest 15k EUR of his time and parts in it and earn a margin of about 5k EUR.


Now let´s look at the investment case of a Grand Piano in another way. Again I will use the example of a Steinway Grand Piano, since I don´t have any other data available. In 1986 a Steinway B model (211 cm) the retail price was 27,180 USD in the US (I don´t have EUR values,  but they will have been similar).  In 2015 that same instrument very similar to the one from 1986 without major innovations had a list price of 96.900 USD in the showroom, 3,5x as much as in 1986! That means an average increase in sales prices of 4,5% per annum – with inflation being about 2,5% in that 30 year period, the real sales price increase amounted to almost 2% per year.


Now the good thing of a Steinway used instrument (condition: excellent, mechanics as new, no cracks in the soundboard etc) is that its price – depending on its age – are a percentage of the retail price of a new one. Assuming you bought a new Model B in 1986 for 27,000 EUR (ignoring the USD / EUR rate for now), the price you would fetch (retail, not wholesale) in 2016 would be about 55,000 EUR! After 30 years before selling it (assuming you kept the piano in a room with about constant humidity, playing it regularly), a restorer will have worked on the mechanics (replacing the hammers, fixing the soundboard, replacing some strings) and probably invoiced you 10,000 EUR, your profit would still have been about 18,000 EUR.


The same is true to a slight lesser extent if you buy a used Grand Piano say that is 30 years old today and in very good condition for 55,000 EUR. Assuming retail prices increase by 3% a year and you still get 45% of new value in 20 years, investing 10,000 EUR in the instrument, your profit will still be 12,000 EUR.


Is this example valid also for other brands? Maybe to a lesser extent for a Boesendorfer or a Grotrian Steinweg. Most likely not for other brands. Retail prices for new instruments also followed the same trend in the last 30-40 years as for Steinway models, but not for the prices for used instruments (in good shape). Only Steinway, being the primary choice for most concert halls and pianists with its continuous quality in production for more than 150 years and its known brands all over the world, can command premium constant prices also in the used market as far as I know.


So what is my conclusion? If you play the piano and appreciate the premium sound of a good grand piano, go and buy one. If you worry about the upfront investment and the question whether you can sell it after 25 years when your children prefer to play a violin or an Ableton Live, go buy a used Steinway and keep it in good shape.


And if you are very lucky and get your hands on an instrument at a good price formerly played by Prince or another VIP, you probably just won the lottery. For example the Steinway Z upright piano used by John Lennon for composing „Imagine“ was sold at an auction for 1.67 million USD to George Michael in 2000.