Many real estate investors that are also hard money clients ask themselves whether home staging is a profitable business or not. In order to give an informed answer to this question, several factors have to be taken into consideration.
At a first glance, home staging is a simple process: the real estate investor buys a low cost property, rehabs it, furnishes it, and, then, sells it to make profit. A look in depth, however, will reveal a few aspects worth analyzing.
It is a well known fact that staged houses spend less time on the market compared to un-staged listings. This is a key factor, since properties that spend a lot of time on the market are detrimental to the interests of real estate professionals. In other words, the less the listing remains on the market, the better.
Statistics also show that home buyers look for houses that feel like home, houses that they can picture themselves in. If the house looks welcoming and comfortable, it is more likely to make a good impression on the prospective homeowners and, thus, increase the investor’s chances of closing the deal.
Of course, when staging a home using hard money, it is important for the real estate investor to consider the monthly interest payments, as well. Being a short-term type of loan, the borrower can choose the time frame depending on the time rehabbing and staging the property might take, with a one month time interval left for showing and, hopefully, selling the property.
Experienced real estate investors should have no problem approximating how long everything will take, since all the aspects of the rehabilitation works are discussed with the contractor in charge of the project beforehand, and staging can usually be completed in just a couple of days.
When thinking of all these aspects and the variables involve, many real estate investors worry that the costs of home staging and the interest to be paid for the loan might decrease or completely annihilate any profit, but the truth is that staging is very effective in adding value to the property and also in expediting the sale, and the simplest solution to finance it is through a hard money loan.