The status of collectibles having matured from mere hobby into an alternative asset class is now undeniable. Investors simply looking to make a profit are routinely competing with hobbyists and those who have a passion to own and display a prized asset.

The Collectors Dashboard was launched to evaluate and analyze collectibles as an alternative asset class. Some of these assets may be valued in hundreds of dollars, but private rail cars can easily run in the hundreds of thousands of dollars for starters and can go up from there.

Collectibles includes many subcategories. Some of those subcategories are solid investments that can compete head to head with stocks, bonds and real estate. Other collectibles may simply be owned for joy or for vanity. Most people have seen or heard of model trains before, but owning a private rail car for travel is something else entirely.

How would private rail cars fit into the theme of collecting or investing? These are definitely pricey, and they may have very different uses whether these were purchased for love and joy or whether or not they would be an investment.

If you are unfamiliar with the term “private rail car” there is in fact a dedicated society of railway enthusiast that fixes up antique passenger cars to own — and to rent out. Some rail cars offer brass balconies to view the American countryside behind Amtrak: the journey is the destination. Restored in the grand tradition of American railroading, these million dollar railroad palaces are designed for comfort.

The original concept of owning a private car was reserved for the very wealthy or used by the president of a railroad to tour the property. Touring the railroad property once meant adding this private elegant business car to the end of that respective companies nicest passenger train or fastest freight train. Today if you have the money to invest they’ve become hobbies of train buffs who wish to recreate a grandeur age of travel.

The American Association of Private Railroad Car Owners, Inc is the organization that has streamlined the rental process. Using insurance provided by Amtrak, it’s a limited liability delight to set sail on a unique land cruise and a secure outlet to rent your car out to keep operating costs down.

Operating costs are not cheap. The “cost to refurbish a car yourself — $150,000 to $500,000, plus, plus, plus. There are a handful of cars that have $1.5 million to $2.5 million invested in them.”

To get a true grasp for maintaining a private rail car, let’s think in other collectible terms. It is like owning an antique house that vibrates all the time. What could go wrong?

Beyond knowing what you are buying and the scope of both time involved and a vast network of contractors your car must pass a final yearly mechanical inspection by Amtrak. Documentation of all safety required working components must be found in a folder on your passenger car to be updated with any further changes or modifications annually.

A full restoration and bringing every component back to a functional condition could cost upwards of $500,000.00 after spending the asking price of the car. The website sterlingrail.com currently lists two passenger cars for sale:

• Pullman Private Passenger Car TCRY 106 built in 1925 as Pullman Central Plains for a sale price of $225,000.00
• Northern Pacific “North Coast Limited” observation car needing restoration for $59,500.00.

The price of renting a private car typically starts at $9,000.00 per day according to the website privaterailcars.net. This website is a broker for planned private journeys using established passenger car owners and advertises trips in both Canada and the USA as well as abroad in Europe. Amenities provided include catering staff, fine dining, and a staffed bar.

This service should be understood as the very high end of the spectrum price wise. Not every charter service will offer to have a helicopter meet the train in order to make private jet connections, but as the saying goes the customer is king and as Willie Nelson famously sang “if you got the money honey I got the time”.

Amtrak (as of 2021) will charge an annual activation fee of $250.00 per car at the beginning of each calendar year. Holding fees in major cities will amount to $100.00 a day plus the optional cost of car washing and sewage holding tank servicing. The minimum charge for any trip movement by Amtrak is $1,000.00 and presently in 2021 the rate is $2.10/mile for the journey.

The American Poet Edna St. Vincent Millay perhaps summed up the concept of grand rail travel best in a poem titled Travel:

“My heart is warm with the friends I make,
And better friends I’ll not be knowing;
Yet there isn’t a train I wouldn’t take,
No matter where it’s going.”

Private rail cars may be money-makers to some collectors and investors, but they come with high price tags and maintenance costs that a detailed business plan might be in order. Then again, owning a private rail car may end up just being an ultimate vanity piece owned by people with a passion for the railroad industry and Americana.

There is a saying that goes “If it flies or floats, lease it.” Let us know how your rail car owning experience worked out.