What is Staging?

Staging, in real estate, means to temporarily decorate or dress a home in a scale down version-so you would not completely furnish a home, just add some purposeful decor, color, touches, create a focal point in each room-all primarily for the purpose of selling or renting a home much more quickly and for a higher price. When done correctly, staging creates emotion, comfort and feelings and as we all know, theses are the things that sells houses. I just staged a home for an investor that had an open rental on the market for over 2 months-we staged it and in 3 days, he not only had it rented, but did so as a Rent to Own with a $10,000 option consideration. We just painted the picture for the tenant buyers.
Why would you stage an investment property?

I think, "why wouldn't you stage an investment property?" I stage my own investment properties because it helps them to sell and rent right away. As investors,realtors, builders, even home owners, etc. we have objectives, goals, exit strategies, etc., the common thread is that we are all doing this to make more money or to be able to fund our next home or project. We want our house to sell, we want our house to rent, we want to wholesale that property-when I stage a property, I have practically zero days on market. My past two homes were leased before they were even on the market because we start to stage from the very beginning-outside in-we start with curb appeal. Plus, if you sell or rent or flip quickly, you eliminate so many hassles, --holding expenses-it shows well so you don't have to make excuses-bottom line-the property transacts so much faster-and we make our money-more money.
What are the benefits of Staging?

Much of what we said earlier-you eliminate so many hassles, because your house shows significantly better. You don't have to work at creating a feel for the prospective buyer or tenant-it is already there. Additionally-the property transacts in what seems like days versus months. You will save enormous amounts of time, by having to show your investment much less often-and you will save all those months of holding costs, mortgage, utilities, etc. A staged home will sell or rent before an empty house every single time. Do any of you have empty properties? Are they staged? Are they staged correctly? Finally, the income potential is far greater. You have not just produced a rental, but rather a home. People will pay for things they feel good about. You are setting the stage for those feelings. I will talk later about the prices that I get versus other investors in my area for virtually the same properties-the difference is astounding.
Can you stage a home no matter your exit strategy?

Yes! Yes! Yes! You should stage a home every single time. Now, depending upon your exit strategy, you will stage it differently. Basically, you need to evaluate each home. What is the exit strategy? What type of neighborhood are you in? Where are you geographically? What is your Budget? Obviously if you are going to rehab and retail, your staging process will be extremely different than a wholesale deal.
What if the home is listed with a Realtor?

Staging is something that many realtors feel like they instruct their clients on, but most don't actually do it properly. They tell you to sweep the floor, make the beds and put out fresh flowers. Well, that's just cleaning and flowers. And although I think cleaning and flowers are important, it is not staging. If your home or investment properties are listed with a Realtor, same staging rules apply. This will actually really excite your Realtor, and you may just get a little more work and enthusiasm from them, hence yielding shorter DOM and greater profit. I would highly recommend that you stage the properties that you have listed with a Realtor. The best part is that once other realtors start showing the house and see how nicely staged it is, word will get around-they will be more eager to show that house, but you can put them on your list the next time you have a property available and they will be eager to bring in new clients-thus, the ball starts to roll.
Should you stage a FSBO?

FSBO's are exceptionally important to stage because you are trying to compete with the MLS and the inner-office and networking --advertising and marketing available to Realtors. But again, if your FSBO is for sale and the house next door is listed with a Realtor, a perfectly staged home will still sell much faster than one that is not. This is also where curb appeal will really come into play. Make sure your house looks better than the neighbor. You will also want to put a lock box on the door, this is part of my staging kit, so when you do have those people driving around-you can tell them how to go inside and look around-right when they are feeling all warm and fuzzy about your pretty flowers and garden figurines.
Would you consider staging Mult-Units-if so, why and how?

Think about this, no one stages multi-units-so, if yours were, how much faster would they be rented? I will say it again. People act on emotion. Many multi-units offer low security deposits-free first months rent, etc.-what if yours just looked so nice, that no one could pass it up? That way you would be making twice the money because you would be getting paid and not offering incentives. Most affordable multi-units are not that well maintained. Just because someone is looking for a lower rental cost does not mean they are looking for a dump. Additionally, we generally find that when you deliver a unit or property in nice condition, it stays in much better condition. You can even stage commercial buildings. Paint the picture for your commercial buyers and tenants-you can then rent these furnished -and ask for- and receive a far greater monthly income. Because you are eliminating their hassles and saving them time. Time is money and people will pay for it.
Can't you just clean, paint and carpet?

Nope-you should clean, paint and carpet or at least clean, power wash and steam clean-but that is like saying "isn't it enough to just graduate from grade school?" No, it is not enough, you need to go on to high school and college and so on. To clean, paint and carpet a home is the beginning. It is laying the ground work. You still have to set the stage and create the emotion. Carpet-although nice and often warm and fuzzy-elicits no emotion. Imagine that you are creating your own little real estate play. You want your prospective buyer or renter to stop- and feel as though they just walked up the path to their very own home. They paused to take in the light and fragrant lavender growing in the tiny ceramic pots. Upstairs, they see the master bath, they imagine they just got out of their shower, where the scent of their favorite soap still lingers and then dry off with fluffy white spa towels. That their toes are scrunching in the soft fibers of the lush carpet. And then they glide into the kitchen, barefoot, to relax over a steaming cup of coffee before leaving for work. The birds are singing and the sun in shining-it is going to be a great day because you just sold your property! Staging is creating. You have to create some emotion -appeal to their senses.
What type of Real Estate Transaction does staging lend itself to?

Every Type. We have already established the fact that people buy on emotion. Business people buy on "ease"-meaning that the easier and more hassle free it is, the more likely a positive transaction. What if you wanted to wholesale a property? There are always other properties available at the same time. Now generally, with wholesaling, we think of "as-is"-the worse the better-and I happen to agree with this to an extent. But what if someone was deciding between your property and one other? What if your had a few items out that made it more appealing? A planter on the steps, towels and a soap dispenser, a plate of apples and an air freshener in the kitchen, useable items in the bathroom, etc-Even as investors, we still have, and act on emotion. Our subconscious tells us that this house is easier, friendlier, more appealing-will sell faster. The same is true for a rental. Depending upon their price range, people have different expectations from a rental. What if your rentals offered the comforts of home? Just a few things can create a space so appealing that you will rent to a better class of renter, they will keep your property much nicer, and they will stay longer, making it much more profitable and hassle free for you as the landlord. What if you are doing a rent to own. Staging a home for an end user is an excellent opportunity to "paint a picture" for them. Keep in mind, your Tenant Buyer is looking for a house to call a home. You've heard that old real estate trick of putting cookies or freshly baked bread in the oven just before you have people tour your home, well that is not too far off. People who do this are trying to appeal to the senses. Just like when we go to the movies-we have to have popcorn-I don't even like popcorn, but I get it everytime, because it smells so good. With end users, you want to allow them to see how their home will look-once they move in. How will the master bath be different from the main bathroom? Is there a bedroom for children? How do they know? How do they feel as they pull up to the house-does it seem welcoming and cozy? Does the kitchen have a family feel to it? These are the things that you have to keep in mind when trying to transact your property. Whether the buyer, investor, realtor, Tenant buyer or renter actually realizes it, this is what they are thinking or feeling. That's why using staging during any real estate deal is beneficial and will prove to be much more profitable. And of course, since this house looked so great, don't you think that your current buyers or tenants will tell their friends about you? Mine do. I filled two of my houses from referrels of current tenant buyers-
Once you have purchased a real estate investment property, at what phase do you begin to stage it?

How much you want to stage depends upon your exit strategy. But, without exception, I begin staging on day one. You can always start by cleaning up the yard and putting out some plants and a pitcher of lemonade-put a sign in the yard-House for Rent and free lemonade. People will think it is cute and stop by for a look. Get their name and contact info for your data base, or for when the property is ready- or for your next one. Or sell it as is-it only cost you a few plants and some lemonade. You have to think of staging as marketing. People ask me how I market. This is part of my marketing. I tie my staging and marketing together, it makes my properties unique and eye catching. Oh, and we stage almost always, from the outside, in. Curb appeal is the first impression with the exception of an ad-which is why it is important to tie your marketing together. By beginning to stage from day one, the property will continue to grow in its appeal daily-neighbors will stop by for a look and tell their friends. You are building on the emotional draw.
Does it really make a difference?

If it didn't I would not be wasting my time. The numbers speak for themselves. My days on Market are far less than any other investor in my area. As a matter of fact the investors in my area are asking me to come in and stage their houses! And I am making significantly higher numbers, not only in my monthly income from rent revenue, but in my resale numbers as well. But, a huge advantage is appraisals. I had one house that appraised at $139,000 when we bought it. I had to refinance right away because it was purchased on hard money-we cleaned, painted and staged-no new carpet, nothing structural-cleaned, painted and staged-the new appraisal was $185,000! That is a $46,000! So, the difference that staging makes is astounding in a variety of ways.
What are some of your examples as to how staging worked for you?

I have several examples as we stage all of our homes, no matter the exit strategy. One that I just mentioned. Another, regarding appraisals is a home that I purchased in pre-foreclosure. We purchased it for $83,500-the appraisal came out the same. We put in just over $5,000 of fix-up and staged the home. We did paint, carpet, clean-up and small fixes such as a small hole in the wall, missing knobs, caulking, etc. Then we staged. Our appraisal was $200,000. This same home, we decided to do a Rent to Own-we took a $5,000 option consideration, $1450/mos. Rent (our payment is $567!) and have a 12 month contract for $214,000! Not a bad day. -Another example is a wholesale deal that we did-Our profit was $10,284.-All we did was trim the bushes, lay a mat over the steps, put out a welcome mat and a few flowers. It turned immediately. The other homes we have staged for investors, realtors and builders have had similar results. How do you determine your budget for staging? Again, this depends upon my exit strategy. Sometimes my budget is determined by the option consideration that I will require. Other times, it is based on what I might be getting back at closing. But ultimately, I know my budget before I buy the home because I know my exit strategy before I buy the home. If I already know that I am buying the property as a long term rental, my budget is going to be far less than if I were going to rehab and retail. My budget gets built into my buying plan before I ever purchase the property. Then, once I have transacted the property-I walk thru with my clipboard and camera and begin my plan. I note everything that is wrong, needs updating, fixing or changing. I photograph it. I create a "wish" list and figure out what I would do and how I would stage if I had an unlimited budget-then I scale down from there to fit my plan and budget.
Does your budget include curb appeal?

Yes, as we said, curb appeal is the first thing you will do to a property, and is often the first and last impression you leave. It must be included in your budget though. What can you do with paint, clean-up, flowers, --can you place rocks that are in the yard into a unique formation and create a flower bed or a rock garden with a few cacti? Is there anything on the front of the house that welcomes people-any fragrances that appeal to the senses when they get out of their car? What are the sounds they hear? A fountain maybe or even some soft music that is coming from the inside. All of these suggestions require minimal budget and create maximum impact!
How much does it cost?

Your costs are generally determined by your budget. How much do you have to spend-and again, what is your exit strategy. You need to make a maximum impact with a minimum dollar amount. The biggest mistake is to over fix or over stage. And, just like contractors, you can hire an expert to stage your properties-or , just like contractors, if you watch them enough, maybe ask questions, you can learn to do it yourself.. Let me say this. When you start to invest your time in real estate, whether you are an investor, builder, realtor, whatever-did you just go out and do it or did you have to read, study, attend seminars and classes, have a mentor or do an apprenticeship? The same is true with staging-invest in the beginning, learn how to do it correctly then make big profits in the end.
Can you use your current construction crew to stage the property?

Earlier, I told you my process of walking thru a house or unit with a clipboard and camera. How I take before pictures-see what needs to be done, create a plan and a wish list and then cross reference that with my budget. Depending upon the budget and the plan, you can use your crew for some of the work. Maybe we want to paint some walls a vibrant color or tone them down-we might need to move appliances around-create some better lighting or hang a door. All of these things can be done with your current crew as long as they are good at taking direction. The final phase of the staging though, should be done by someone that understands the process of setting the stage-creating the emotions and painting the picture. Most crew are good at dry wall, bad at eliciting feelings-which again, is what will sell your property!
How long does it take to stage a property?

Depending upon the service you choose, staging can be done in as quickly as 72 Business Hours - check out our Staging Services for more info.
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