Tips to Finishing your Basement to Add Value
As a Realtor, I get asked a lot about whether finishing a basement will add value to the home. In the past the answer has been minimal, but with changes in house design, a finished basement not only adds extra square footage to enjoy, it boosts the resale value.
Basements were often been a place for kids to play on cold or rainy days, parents to set up a work shop, do laundry, or in fancier versions construct a man cave.
Then, for years basements were ignored—considered too dark and musty, and unlikely to provide a smart return on investment.
As housing sales stalled in more recent years and many homeowners stayed put rather than moved, they recognized that their lower levels could become potential living space, if improved, and for less than adding on to their first floor. “They already owned the space, paid taxes, had a roof, walls, ceiling, foundation, and sewer hookups in place,” says Michael Kuplicki, director of sales with Alure Home Improvement.
In fact, many architects and contractors put the cost savings of redoing a basement versus an addition at one-third to one-half less, depending on project scope, area of the country, and professionals hired, says architect Duo Dickinson, author of Staying Put. Moreover, the payback could be good, and not making the change might be a deal-breaker, says Charles Barenbrugge, senior broker associate with Jameson Sotheby’s International Realty.
The last annual “Cost vs. Value” Report from Remodeling magazine put the average basement remodel at $61,303 with a 70.3 percent payback, which made it among the smartest redos, along with an attic bedroom, minor kitchen redo, deck, and new entry door.
13 Tips to Improve Resale and Cut Costs
1. Know that the appraised value of underground space is half what lies above—about $250 a square foot versus $500 in many cases, says Neil Salvage of Lending Tree Home Pros, which provides lede generation for borrowers and contractors. His advice: Don’t spend more than 10 percent of your home’s value on refinishing your basement; better yet, stay between 5 and 10 percent.
2. If concerned about payback, opt for uses that appeal to a wide cross-section. Think casual family room, home office, or extra bedroom, says real-estate saleswoman Stephanie Mallios with Towne Realty Group. Walk-out basements also increase enjoyment if your property has the right topography, says Salvage. And understand your family dynamics. Some small children may not want to use a downstairs play room unless a parent will keep them company, says designer Valerie Ruddy of Decorating Den.