As real estate investors, we’re always striving to get our properties sold quickly and at a price that maximizes returns. I have heard, and I’m sure you have as well, that staging a house—especially an older or vacant home that may have some quirks—is key to engaging potential buyers’ interest. To understand just how much staging can benefit investors, we sat down to chat with HomeVestors® Development Agent, Alan Washer. As a veteran real estate investor in the Chicago area, Alan is full of insight on how to maximize your ROI by staging your properties at every price-point for quick sale.
Staging Lower-priced Homes
While downtown Chicago real estate is booming because of Millennials, there are still many houses to buy and rehab in the city and suburbs where there’s more affordable pricing for working families. The median price for these homes is around $220,000, but some properties that Alan sells have a market value as low as $110,000. Regardless, Alan stages even these starter homes.
“The price of the home doesn’t necessarily dictate if I will stage it. My investment houses get sold faster and I get more out of the sale with a staged home. I haven’t seen anything to signal that we shouldn’t do it just because the value of the house is lower,” he explained.
His line of thinking is supported by National Association of Realtor (NAR) research showing that almost half of Realtors® believe that staged homes bring in offers that are 1% to 10% higher than what you would receive on a non-staged house. Anecdotal evidence supports this practice too, as it’s widely reported that vacant homes tend to sell faster when they’re staged.
Potential ROI for Hiring a Chicago Home Stager
It’s always tough to give a hard estimate on potential ROI, especially when it comes to something like staging. But Alan asserts that it is never a bad move to invest your money in this way. There are a number of home staging companies across Chicagoland and, according to Alan, their services and costs can vary. Some provide furnishings because either they have their own stock or they have an established relationship with a furniture rental company. Others just provide a design consultation and sellers are tasked with renting the furnishings on their own. Generally speaking though, Alan says, to hire a full-service professional stager in the Chicago area, you can expect to spend anywhere from $2,000 to 3,000, depending upon the size of the house and the number of rooms that need to be staged.
In terms of how much more value staging can add to even on a lower-priced house, Alan shared his experience:
“If I can make an additional 5% on a $200k house, that is a big number. If you spend a couple thousand dollars on staging, you might get a full offer versus a 3% discount for concessions. That could be somewhere in the neighborhood of $5-6,000 net. After spending the money on staging, you’re talking maybe $2k to $3k of in-pocket profit.”
With just a couple of thousand dollars invested in home staging, that amounts to a 100% profit or greater.
Getting the Most Out of Your Money
While keeping a house clean and free of clutter is a no-brainer, taking the next step with staging can have an even greater positive impact on the property’s end value. Staging a property helps buyers envision possibilities in a future home that they may not have the ability to imagine in an empty house. While many factors are at play when buyers make an offer, Alan believes that staging can provide that extra little push to convert lookers into buyers, often at a higher price than investors would otherwise get—even for a starter home. With over a decade under his belt working as a real estate investor in the Chicago area, Alan knows the ins and outs of the local market. And, as a HomeVestors® Development Agent, he shares it with new local franchisees on a daily basis.
You, too, can join the HomeVestors® franchise network and share knowledge and experience, learning how you too can boost your ROI this year with the best marketing tools for investors.
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