As we enter 2023 there is a lot of uncertainty in the property world and also gloom and doom. Are we in danger of talking ourselves into making things worse? There is a danger that the doom and gloom become self prophesying so what can you do?.
Over the last couple of years we have seen a market unlike any other, with properties selling as soon as they hit the market (sometimes even before) and for substantial amounts over the asking price.
The market is returning to something more like normal which means that a little more effort is going to have to be put into the selling of properties. This where the team of professionals around you is going to be more important as discussed in my previous blog. In this blog I want to share some tips on how to navigate these troubled waters.
Challenges
In these uncertain times there are a number of issues investors and developers are facing :-
- Cashflow
- Margins
The challenges I see ahead are two fold. Properties are starting to take longer to sell. This obviously impacts on cashflow. They aren’t selling for as much and looking on the portals I am seeing more price reductions. This results in lower margins. Staging your property so that it appeals to your target market will help it stand out from the competition.
Cashflow
The turn around time on any project can have major implications not only because of interest payments on any finance but also it may impact on your ability to take advantage of any opportunities that arise. If a suitable project pops up you want to be in a position to proceed. It is also true that the longer a property has been on the market the more likely it is that any prospective purchaser will offer low.
Margins
The amount of profit you make on a project can make or break your business, you want to be maximising the sale price not making price reductions. Are there other ways you can improve your margins aside from cutting costs? How can you achieve the best possible selling price?
Business Strategy
Your strategy for achieving your financial aims might include developing your brand so that your company gains a great reputation. Having staged properties can help your company image. Your marketing materials won’t look very interesting if they consist of images of empty rooms. CGI or virtual staging are a great tool in the early stages when you might want to attract early interest but what happens when potential buyers view in person? You are back to an empty property which means buyers will be disappointed when they cross the threshold. Consider instead, a brochure for each development/ property showcasing your work. It is also an opportunity to establish your business identity. Whilst I am not suggesting using your brand colours to decorate every property, you can certainly demonstrate your brand values in the way you stage the property, for example the materials and products you use. It is a way to demonstrate what you stand for.
The Empty Property
If the property is a new build, a conversion or renovation, it is often presented very much as a blank canvas, the walls have probably been painted white or magnolia with neutral coloured carpet. It is easy to believe that this it what buyers, after all they often talk about wanting to their own stamp on a place. But, let’s face it, such spaces are uninteresting. This is a problem not only from the point of view of marketing, buyers will scroll past the images because there is nothing to grab their attention. It’s also a problem because many people struggle to visualise i.e. they can’t picture the life they would enjoy if they lived in the property. What people want is a home. These matters are linked but I’ll examine them separately here. Let’s start with visualisation.
Visualisation
According to one dictionary definition Visualisation is
1: the formation of mental visual images
2: the act or process of interpreting in visual terms or of putting into visible form
In this context we are talking about buyers being able to imagine themselves living in the property – if they can’t they won’t buy. One example of this is spatial awareness, it may be difficult for buyers to work out what furniture will fit in a space or plan a layout. Think of Kirstie Allsopp lying on a bedroom floor to demonstrate whether a bed will fit. A second example would be how they would use each room to meet their needs. Every property needs to reflect what the target market for that type of property is looking for.
Feeling
Visualisation doesn’t just involve buyers “seeing” the lifestyle they want, you want them to feel it too. You want them to be able to not only picture the family gathering, the cosy evening in front of the fire, the relaxing soak in the bath etc. You want them to enjoy the feelings that that these scenarios will generate so that they then say “I can really imagine myself living here”. After all, how often on property programmes does the presenter take the participant to a property that, on paper, is perfect, only for that person to say “it ticks all the boxes but I’m just not getting the feeling”. An empty property makes it hard for buyers to experience feelings.
Marketing
So how does visualisation affect your marketing? It’s all down to how people look for properties these days. Previously, if you were looking to buy a house or move, you would visit all the local agents who would have premises on the high street. You would register with them and the agent would assist you to identify suitable properties and you would take away a sheaf of brochures that you would look through at home before booking some viewings. These days we simply go online, enter our search criteria and a selection of properties pops up in our feed. The feed will show one image, usually the frontage of the property, or perhaps three images if the property has a premium listing. You scroll through, ignoring those that don’t appeal and click through any that you think might be of interest to see more images and read more about the property. It’s a bit like internet dating where a lot depends on the “Profile” picture, think of the image that appears in the feed as the “Profile”. But it doesn’t stop there. If your prospective purchasers have clicked through before they book a viewing they need to like the images they see. The point about an empty property is that images of empty rooms quite simply aren’t inspiring.
What is Visualisation In Practice?
What then does visualisation mean for an empty property? It means furnishing and dressing the property in a way that will appeal to the target customer – families, couples, professionals, whoever that customer (or customers) is. It’s setting the scene so that your customer can easily imagine themselves living in the property. This is what staging is all about.
For example, if your property is aimed at families with young children your buyers might want a big kitchen where they can be together and perhaps be cooking with the children. In this setting you would set the scene by including an area on a worktop or table with bakeware and utensils. This makes it very easy for the buyers to picture themselves enjoying the activity.
Cost
If you are a developer or builder developing, building, or converting a property for the first time you may be on a tight budget and worried that you will not be able to afford staging, in particular the cost of the “inventory“ i.e. the furniture, accessories etc. I always use the term investment rather than cost. Yes of course there is a cost in terms of an expenditure but staging is just as much an investment as buying a piece of equipment or undertaking training in a particular skill. In appropriate cases I can provide furniture on a rental basis or I can source items from rental companies. Smaller items you purchase can either be reused on future projects where appropriate or again supplied on a rental basis. I will discuss solutions that are appropriate for your particular project.
Process
Staging an empty property involves more than just shopping. It needs planning in order to produce the desired results. I have a process that I follow when staging empty properties for property investors, builders and investors
- A first meeting – to find out more about your plans and for you to meet me
- Follow Up – confirmation of the initial discussion
- Site Visit – to take all necessary details and photos
- Scheme – each property will have a cohesive appearance throughout
- Inventory Preparation – a list of what is required on a room – by – room basis
- Inventory Purchase – purchase of all items that it has been agreed will be purchased on your behalf
- Installation – bringing in furniture etc and hanging of artwork
- Dressing – adding of accessories and final touches
- Photo Shoot – attending photo taking to supply items such as flowers, cakes, preparation of coffee etc
- Destage – removal of all contents except those purchased on your behalf.
To learn more about the the process and the different stages read the full blog HERE
And Finally …
The purpose of this blog has been to give you – the developer, builder or property investor, an insight into why empty properties are more difficult to sell. Staging your empty property can add value to the property and to your business. There is more to staging a property than simply bringing in a few fluffy cushions. Any project I undertake will take into account the particular market the property is aimed at and could be an opportunity for you to demonstrate your company’s values. If you would like to learn more call me on (07745) 876182. I cover the Wirral, Cheshire, North Wales and the North West
Featured Image Raymond Jones https://raymondjonesimages.com