Although most homeowners do not want to start “from scratch” when they move into a home, certain high-end buyers like nothing better, and high-end sellers are accommodating that desire by employing a practice known as “white-boxing” to make their homes a blank canvas for the next buyer. White-boxing involves stripping out all of a property’s finishes and amenities before selling it. The move renders the home “designer-ready” instead of move-in ready, which is the more popular trend across the price spectrum, but this is less of an issue in high-end homes where many buyers end up ripping out most of a home’s current features anyway.
“A lot of times, people will buy something totally done, beautiful, and they’ll still rip everything out and start over,” observed Beverly Hills Coldwell Banker sales associate Jade Mills. “This trend is more buy it, do whatever you want to do, and you don’t have to pay to rip out someone else’s design,” she explained.
Investor Insight: This practice, if applied in the right context, could help you move a high-end property quickly and without costly renovations.
The practice may be so extreme as to involve removing everything down to the concrete and studs in huge penthouses, which CNBC’s Diana Olick speculated may help buyers feel better about their sweeping renovations, which they “all know is not exactly environmentally sound.” She added, “It’s tabula rasa real estate at its finest.”
One advantage of white-boxing for a real estate investor could be that it helps older properties seem new and full of potential, to the right buyer. A buyer with the mindset that they are going to re-do an entire property anyway may see the stripped-down real estate as a bargain even if it is not marked down. Since luxury buyers tend to prefer highly customized properties, it also can save an investor from engaging in costly guesswork about what a buyer will want in the property.
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