08.11.2020 - Rolex

Is a Rolex a good investment?: A guide to Rolex investment

Rolex is undoubtedly the world’s most famous luxury watch brand. From watch enthusiasts to those who know little about watches, Rolex is recognised across the globe for being a symbol of luxury, style, success and quality.

With a history stretching back to 1905, Rolex watches are not only sought after by the elite but the brand has also produced several revolutionary innovations that have aided the military, scientists, NASA and professional sports players. 

Rolex watches are among the most prestigious watch brands in the world and to reflect their quality, precision and style they equally have a prestigious price tag. Not only are Rolex watches high value but their value can also increase, making them a great investment.

However the value of a Rolex can vary depending on supply and demand. For example Rolexes that are in good condition or are considered rare will be of a higher value than those that are not. In this article we take a look at what makes a Rolex a good investment as well as look at the things you should consider when buying a Rolex as an investment.

Is a Rolex a good investment: Things to consider

  1. Consider whether it is a rare Rolex watch
  2. Consider whether it is a vintage Rolex or a collectable Rolex
  3. Consider whether it is one of the most popular Rolex models
  4. Consider whether it is made from an in demand metal

Rare Rolex Watches

As Rolex is one of the most popular luxury watch brands in the world, it’s understandable that they would be in high demand. Although all Rolex watches carry the same finesse, not all Rolexes hold their value as well as others. One of the most likely signs that a Rolex will increase in value and will make a good investment is how rare it is. 

Some Rolex watches value has drastically increased over the years compared to others. This is because the demand for them is extremely high, while the supply of them is limited, thus them then being considered as a rare Rolex. However there is no way of knowing for definite which pieces will increase in value.

An increase in value can also be applied to some second hand Rolex watches. Buying a preowned Rolex usually means it costs less than a new one, which is what makes them such great entry level luxury watches, however there are some instances where a preowned Rolex will be worth more than a brand new one.

There are several reasons a preowned Rolex could be worth more than a new timepiece, including that that specific model is no longer in production or that it was a limited edition design and only a small number of them were made.

When a Rolex watch is in short supply, buyers and investors are willing to pay a higher price. Often considered as the most desirable pieces by collectors, rare and hard to find Rolexes often attract the highest bids at auction, which is what makes them such good investments.

Examples of the increase in value of some Rolex watches can be seen when looking at some of the most expensive Rolex watches ever sold. For example in 2017, Paul Newman’s Rolex Cosmograph Daytona sold for an incredible $17.8m at Phillips in New York, making it the most expensive watch ever sold.

Vintage Rolex Watches

Vintage Rolexes are almost a fail safe when it comes to Rolex watches to invest in. Their value often increases over time making them a good investment. This is because there is only a limited number of them available, making them more desirable to collectors and watch enthusiasts.

Although modern Rolexes that are still in production are still extremely desirable and have the same quality and luxury feel as vintage Rolexes, they are readily available and do not have the same exclusivity. It is therefore less likely that their value will increase compared to a vintage Rolex.

Vintage Rolexes have seen a significant increase in demand over the years as watch collectors and enthusiasts seek to acquire a piece of Rolex’s illustrious history. As well as being an established and sought after brand that has aided the military, scientists and professional sports players, it’s believed that each vintage timepiece has its own unique story to tell.

Another factor that makes vintage Rolexes so popular is that as time passes pieces can disappear, are broken or have signs of wear, making good condition vintage Rolexes with all of their original parts even fewer and far between. This means that many collectors are willing to pay a premium for a vintage Rolex that is in good condition and is exactly the way it was when it was originally manufactured.

Best Rolex model for investment

Investing in a highly sought after watch model is a good way of getting a return on your investment. The trouble is knowing which are the most popular Rolex models. Fortunately for you, we’re here to help and have all the insight into which styles are a great investment.

As a general rule, Rolex sports watches reliably hold or appreciate in value. The most popular sports watches include the Rolex GMT-Master II, the Rolex Daytona, and the Rolex Submariner. Whilst all Rolex sports watches are extremely popular, the ones that are most likely to increase in value are those that are no longer in production.

Special editions of these sports watches, such as the Rolex ‘Hulk’ Submariner with its green bezel and the Rolex GMT-Master II ‘Batman’ with its black and blue bezel have also seen an increase in value over time. 

It’s not just popular older sports models that can increase in value, even newly discontinued designs are known to get snapped up. It’s a safe bet to say that Rolex sports watches are likely to increase in value due to them being in such high demand.

However it’s worth remembering that over time trends can change, although it is quite unlikely that Rolex sports watches will ever go out of style, not least any time soon.

Rolex Metals

While in theory you may believe that Rolex watches made from precious or unusual metals such as gold are more likely to increase in value, it is in fact those made from steel that are currently a better return on investment. This is simply because steel Rolexes are in higher demand. 

Although the price of gold can be quite unstable, some believe that because it holds its value in the long term it’s a good choice for a Rolex investment. However their often higher price tag doesn’t guarantee that it will increase in value, while steel Rolexes have continued to grow in popularity.

Whether this is a style choice or that steel watches are considered more wearable, the market for Rolexes made from gold and other precious metals is just not as big. However this could easily change over time as taste and style evolves.

The same can be said for Rolex watches featuring gemstones and diamonds. Again this is purely down to demand and the demand for precious metal Rolex watches or those featuring gemstones is simply not as high as it is for those made from steel.

Why does the value of a rolex watch increase over time?

The Rolex brand is quite simply, the most recognised name in watchmaking history and its popularity has continued to grow. Much of its appeal lies in its exclusivity even though more people than ever own a Rolex. 

If we have learnt anything from luxury brands it’s that eventually their popularity has the potential to peak and downturn. However this is absolutely not the case for the Rolex brand as the cost of owning one of their timepieces continues to rise, adding to their desirability.

A research article by A Blog To Watch, found that one of the ways in which Rolex has been able to keep its exclusivity and thus keeping its appeal is by drastically increasing their watches value well above the average rate of inflation.

For example at the time of the Rolex Submariners release in 1957, the watch cost $150 and the average American salary could buy eleven Submariners per year. In theory if we take into account monetary inflation, the average 2014 American salary could buy you six Submariners per year.

Or in other terms if we take the original $150 price of a Submariner in 1957 and adjust it in line with inflation, today it should cost $1,265. But in reality, in 2014 Submariners sold for $7,500. The average value of a Submariner has therefore increased drastically above the rate of inflation.

Although in reality it’s a little more complicated than this, we can see that part of Rolexes increase in value is that it has transitioned from a tool for professional use to a desirable luxury item.

How to keep your Rolex in good condition

If you are buying a Rolex for investment, it’s important that you keep it in excellent condition. Although Rolex watches are made from the best hard wearing quality materials, your watch’s condition is a key factor in its value. Made from materials such as Oyster Steel and crystal, your Rolex is designed to last, but taking additional care is advised as an unused watch will most likely sell for more than used one with visible wear and tear.

That being said, while it is important to take special care with your Rolex, they are designed to be worn and enjoyed. Even if you purchase a Rolex purely as an investment, it’s hard to resist their appeal and charm, and why should you?

There are several things you can do to help keep your Rolex in good condition. Firstly make sure that you are storing your Rolex properly by keeping it in a watch box overnight. In addition you can have your watch serviced at Luxe Watches. Our watch servicing consists of a health check, clean and polish as well as a 12 month warranty, ensuring that your watch is properly cared for.

Making the right Rolex investment

It’s important to know what you’re doing before you invest in a Rolex. Like any investment, it’s a risk and nobody truly knows which way the market will move. But if you do your research then you’re putting yourself in a strong position to make an informed decision.

But if you would like advice on which Rolex to buy then why not give us a call on 0203 397 1596 or visit us in store for a chat. You can also buy pre owned Rolex watches from the Luxe Watches website. We also have a “sell my Rolex” service. Check out our free 60 second Rolex valuation tool