What onshore asset can return 100%, legitimately tax-free, in ten months?

Two assets achieved that this year and they were both classic motorcycles called Montesa and Bultaco. They are not exceptions, but flags to an asset class that is tax-free, not located off-shore and not part of a tax avoidance scheme.
These two brands are flags, indicators of a quiet, fun, pleasurable lifestyle that is about to take off and deliver further incredible returns. I will go further into the details of the classic motorcycle market in future blogs, because many people have been enjoying incredible tax-free returns over the last thirty years.
Let me explain and use these beautiful little Spanish motorcycles as an example. These particular bikes are also great fun to ride on the weekend in competition trials or moto cross and there are even schools where you can learn how to ride them in competition. It is great, inexpensive fun. But most importantly, these machines are also a flag. A very clear signal of an emerging market in classic motorcycles.

1978 Bultaco Sherpa 250 trials motorcycle.
1978 Bultaco Sherpa 250 trials motorcycle.

For the last two years I went round buying up old Spanish dirt bikes, Montesas and Bultacos, because you could buy good original ones fully restored for about £900. I also grew up riding them and love them, so I know these motorcycles very well and also know which ones are investment grade motorcycles.
The cost of restoring these machines is four times what I was paying for them last summer. For example, although personally I dislike powder coating, the cost of powder coating the frame and other miscellaneous parts will be around £500 alone. You can easily chuck £700 at the engine, rebuilding it yourself. The cost of restoring such machines, including buying a donor bike, is around £4,000, excluding labour.

Very rare twin shock moto cross motorcycle
This 1976 Mk9 Bultaco Pursang 250 has been beautifully and sympathetically restored.

You have to know what you’re buying, as with all classic motorcycles, or you can easily land yourself with a pretty, but fairly worthless machine. What I paid £900 for last summer, I can sell even on Ebay, for £2,500, and I never buy or sell on Ebay. I have not bought or sold a motorcycle on that website for over two years.
It was obvious to me, as I have grown up with such machines and worked for several decades in the motorcycle industry, that these beautiful Spanish motorcycles would become highly desirable classics. Obvious, because they have all the ingredients of a true classic.
1. They are all beautiful, desirable motorcycles.
2. They have great racing heritage.
3. People in their forties and fifties grew up riding them.
4. There are less investment grade motorcycles available to buy than there are people with the means to buy them.
5. They cost a lot more to restore than to buy a fully restored, investment grade example.
Clear indicators that these motorcycles are incredibly undervalued and there is a demand for them. They will also increase in value far more, because the cost of the parts will increase and also they are still less expensive to buy than they are to restore.

Spanish trials motorcycles
Montesas are great value investments.

These two emerging market brands are starting to take off and there are others that will follow. Ducati 916 and 996 models have taken off since 2009, some appreciating by over 200% and still have a long way to go (check the ROI charts here).
1970s and 1980s Japanese muscle bikes, too, have a long way to go. The problem is finding true, original investment grade motorcycles, not the kind of machines on auction websites.

Twin shock Bultaco moto cross
1971 Bultaco Pursang, very original, in fantastic condition. A meticulous restoration and signed by the legendary Sammy Miller

For example, I have a 1980 Honda CBX1000. The machine was only made for two years, they were very expensive when they were new and many of them got trashed or customised. So good ones are very rare. They are also iconic, they have an across the frame six cylinder motor and produce 105 brake horsepower. The CBX1000 was a statement from Japan to British manufacturers that it’s over: Japanese machinery is the future. It was also a demonstration of what Japan was capable of mass-producing. The CBX has all the ingredients of a classic motorcycle. Many of the parts are no longer obtainable and a rubbish one will cost you about £6,500. I know someone who paid £6,500 for one on Ebay and, having now restored it, it cost them a total of £24,000 and four years of their life! Yet you can pick up investment grade machines for less than £11,000 by clicking here. These machines have a long way to appreciate. The same is true of Honda CB750s, Yamaha XS1100s, Suzuki GS1000s, Ducatis, Laverdas and even Kawasaki Z900s.
As Chris Evans will tell you (by clicking here), there are three things you need to know if you want to invest in classic vehicles, when he discovered that he had to sell his Ferrari he paid £5M for and it sold for just £2M. He failed to notice that the engine was not the original one for his car. You need to KNOW-
1. That your vehicle is an investment grade machine.
2. The machine you are looking at is original and not a pretty piece of engineering cobbled together from numerous parts.
3. Which machines are true emerging market classic motorcycles.

If you are interested in either investing in emerging market classic motorcycles, or you have an interest in passing your test, enjoying a great lifestyle and watching your motorcycle appreciate, then where should you go? You need an expert who understands these emerging market motorcycles, who knows if the machine is genuine and what is acceptable in terms of restoration, replica parts and whether the engine is the correct one for that particular motorcycle. You need someone who will tell you whether the model of machine you are interested in is going to be a lemon or a great investment.
If you want to know more about investing safely in emerging market classic motorcycles, then contact Paul Jayson: The Motorcycle Broker on this site and find out about the best kept, high yielding, tax-free investment.

Paul Jayson

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