The advantages of Home Staging
Catarina Diniz, co-founder of Home Staging Factory
Do you have a house to sell or rent? You should know that you can put your property on the market much more quickly and with a higher return, simply and with little investment. This is home staging, which is now a major international trend in the world of real estate. Idealista/news interviewed one of Portugal’s leading experts in this “art”, who tells us how to make the most of this concept. Catarina Diniz, co-founder of Home Staging Factory, points out that Local Accommodation has been gaining the most, but not only… Take a look.
What is home staging?
It’s a concept aimed at enhancing the real estate product. It’s putting the house on stage and creating the ideal setting for marketing. The aim is to improve the product so that it is more attractive to the market, so that people looking for a house can visualize the space and imagine themselves living there.
We use various techniques aimed at getting the house in its best condition and raising its potential to the maximum, so that it can be marketed as quickly as possible and at the highest possible value. We often say that it’s the minimum investment for the maximum return.
“We use various techniques to put the house in its best condition and raise the potential to the maximum, so that it can be sold as quickly as possible and for the highest possible price”
For example?
There are several simple techniques, such as depersonalizing a house. In other words, if I go into a house and it’s very personalized, I’m sure I’ll have a hard time imagining myself living there. But if I enter a space that is decorated in a more neutral way, without personal possessions, I can imagine myself living there.
Another technique is to neutralize in terms of colors and decoration. If the décor is too heavy and with very strong colors, such as reds, greens or blacks, I end up not feeling so well, because it’s also a very personal thing, and it ends up being more aggressive. On the other hand, the space ends up looking smaller.
The arrangement of furniture and its size is another very important factor. Often people don’t have a sense of area and buy furniture or sofas that are too big and they end up with no social space. And then, when I walk in as the buyer, I’ll think: this room is too small for me. Which is an obstacle to selling or renting.
Do you have any figures to back this up?
Prices vary a lot, depending on the market and the moment. We’re currently in very high demand in Lisbon and there’s a shortage of product. If it’s a good house, well done and at the market price, it sells very quickly. So statistics don’t even come into it.
For example, in the case of short-term rentals, I’m able to increase occupancy from the current average rate of between 60% and 65% to 90% or 95%. And I can make a house that used to sell for 50 or 60 euros a night sell for 90 euros a night. There are clear figures where an owner can measure the investment they have made and the financial return they have.
“In the case of short-term rentals, I’m able to increase occupancy from the current average rate of between 60% and 65% to 90% or 95%. And I can make a house that used to sell for 50 or 60 euros a night sell for 90 euros a night”
What has been studied internationally is that investment in home staging should correspond to between 1% and 3% of the property’s sale value and, normally, an increase in value of between 7% and 15% is obtained. Let’s just say that home staging is always worthwhile.
How did the idea of setting up your company come about?
Home Staging Factory arose from a need we detected in the real estate market. It all started in 2010/2011, when the real estate market was stagnating and we realized that the product was very undervalued.
I was working in branding and advertising and, at the time, I had left the area and decided to take a course in entrepreneurship and business creation. One of the parts of the course was to make a business plan and I started looking for ideas. At the time, my sister, who is now also a partner in the company and an interior designer, was working in a real estate consultancy and had already spotted this gap in the real estate product and started looking into home staging. I challenged her to set up the whole business based on importing the concept to Portugal.
How was the market received?
It was very good and positive. The real estate consultants joined in quickly, because they knew they had a product with potential but which was undervalued and therefore difficult to market. We were at the height of the real estate crisis and a house took an average of 18 months to sell and the price had to come down a lot. However, after a few meetings, we realized that, despite this, the business wasn’t going ahead because it was difficult for real estate consultants to sell yet another service to homeowners. So we decided to go in a different direction and went to the market directly to try to talk to the owners.
“Home Staging Factory arose from a need we detected in the real estate market in Portugal. It all started in 2010/2011, when the real estate market was stagnating and we realized that the product was very undervalued.”
Did it work?
Then there was better receptivity. There was some fear, because if a person wanted to sell or rent out their house, they wanted to start earning an income from their property straight away. And what we presented, in the end, was the idea of investing a little before monetizing the space.
Only those who really had the mind of an investor began to understand. We started working with some clients who were already operating in short-term rentals and who gradually began to invest in their homes, improving the space and increasing its potential. With small changes, we showed that we could get the owners a very positive financial return. And we ended up making the business go ahead and succeed.
What kind of customers do they have?
Basically, our client profile is small investors and large clients, such as tourist developments that hire us to do model floors before putting the apartments up for sale. We also have foreign clients who are buying in Portugal and want the services of a company that values their property, that knows perfectly how to furnish, equip and decorate a house for investment. And who can respond with confidence and quality without being here in the country.
We also have some private individuals who do a mixture of living in Portugal for part of the year and the rest abroad when they try to monetize their homes. The student segment is one that has also been growing. And there are some clients who are preparing their homes for medium and long-term rentals. In other words, they want a specific decoration to attract company staff or people who are coming to work in Portugal for a period of time.
“Anything where there is product that can be leveraged for temporary rentals is in high demand. But the Lisbon area really stands out”
What about real estate consultants?
Real estate consultants have always valued the concept. The big difficulty was selling more services to homeowners during the crisis. But I think they now have a type of client who values this service, such as foreigners, and so they are now very interested in having partners, such as lawyers and companies like us, among others, who provide them with this type of service as part of a package.
Which areas of the country are most in demand?
One of the key areas is Lisbon. We have a lot of demand in Porto, but we end up not doing much due to logistical issues. And then we also have a lot of demand in beach areas, such as the Algarve, Ericeira or the Estoril coast. Anything where there is a product that can be used for temporary rentals is in high demand. But the Lisbon area stands out.
And within the capital?
The historic area, between Santa Apolónia and Marquês de Pombal, extending to Belém, is the most popular. The Baixa and Chiado areas are very popular and are beginning to spread to the Alfama and Graça areas. Then there were several interventions in the Mouraria area, which was very old and worn out.
Just as when it comes to selling a house, do people generally think they can do home staging themselves, without using professionals?
As with photography, there have always been people who think they can do everything themselves… When we started the concept, there was practically no one in Portugal providing this type of service. Nowadays there are several companies. But, fortunately, there is still room in the market. We don’t feel much competition yet.
“We’ve distanced ourselves a little from the decoration area (…). Home staging has a commercial purpose, oriented towards the market, while the decoration area is more specific to individuals. It’s more about personalizing a space”
There are now also more architects and interior designers who are able to offer a type of service whose characteristics are more similar to our concept. The market was used to the idea that hiring a decorator was a bargain, and nowadays that’s more common. Even so, we have distanced ourselves a little from the decoration area because, once again, I would like to stress that the concept of home staging has a commercial purpose, oriented towards the market, while the decoration area is more specific to individuals. It’s more about personalizing a space.
Are there any tips on basic things to do, without spending a lot of money, that will show results straight away?
There is one fundamental technique that has a lot of impact and return, and which we often recommend, and that is to redesign the textiles and colors in the house. It’s blatant. With little money we can change everything from curtains to cushions and carpets and neutralize the house.
We see a lot of houses with what we call “pim-pam-pum” decoration, with a mixture of garish colors that go well together, but which really stand out. Just remove all that and add some beige or light gray and the house will look completely different.
“There is a fundamental technique that has a lot of impact and return, with little expense, which is to reformulate the textiles and colors in the home”
Another technique is to minimize the number of objects in the house. Take most of the junk off the shelves and kitchen worktops, clean and organize everything. It has a huge impact, particularly on increasing the feeling of space.
