Today, we’re going to discuss 2 controversial topics.
- Is it worthwhile spending money on upgrades?
- Does staging make a difference in selling your home?
Let’s consider 2 brand new units and you’ll see the answers for yourself.
These 2 units are 1+Den units with the exact same layout.
The 1st one is vacant with all standard finishes.
The 2nd one is loaded with upgrades and professionally staged with furniture and decorations.
Alright, let’s go!
The 2nd unit is much more attractive than the 1st one and if both units are on sale at the same time, then obviously this one is going to sell faster and at a better price.
But here’s the tricky part.
How much better?
Let’s suppose the 1st unit was sold at $550,000.
And let’s just say the view is the same for both units.
How much more would you pay for the furnished one?
And the fact that it saves me all that hassle, all that stress and all that time putting everything together, I would say an extra $40,000 would be of good value.
But if I’m an investor, that’s a totally different story because I’m going to rent the unit out.
Would tenants pay more rent for the upgrades?
If this is a long term investment as it should be, then I’m going to keep renting the unit out. With wear and tear, I’m going to see diminishing returns on the money invested on the upgrades.
Can you collect more rent with a furnished unit?
Yes. But your audience would be limited because the majority of tenants would have their own furniture, so you might suffer from a longer vacancy period looking for that right tenant.
Generally speaking, furniture is not recommended for a rental unit.
So if I’m an investor, time and effort buying and installing stuff, as well as personal enjoyment in the unit won’t be part of the equation, then I don’t think I would be paying $40,000 more for this unit.
It would have to be a deal for me to buy it, like $20,000 more.
You see, it makes a big difference who you’re trying to sell your unit to, you need to know your target audience.
So back to our original questions at the beginning.
Is it worthwhile spending money on upgrades?
If you’re planning to keep renting your unit out as a long term investment, then no, it’s not worth it because you’re going to see a diminishing return on the upgrades.
Does staging make a difference in selling your home?
Yes, it does because it creates a completely different feel than a vacant space. It stimulates the emotion to buy.
I would say the couple thousand staging dollars is money well spent because your unit will sell faster.
And you can easily recover that cost from your sold price because the desire to buy your unit is stronger.
By the way, both units from the video below are available for sale. They are located in midtown, at Eglinton and Don Mills, just a 5 minute walk from the Eglinton LRT station, which is opening sometime next year.
If you’re interested to know more about these units, you can schedule a call with me at the link below.