Tips to Finishing your Basement to Add Value

Tips to Finishing your Basement to Add Value

Article by, Lisa Virkus – Realtor Coldwell Banker Weir Manuel and Member of Team Virkus | lvirkus@me.com | (248) 672-8837

Lisa VirkusAs 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.

3. If your lower level shows signs of water or moisture—foundation cracks, for instance, resolve problems first with French drains, a sump pump, back-up generator, or you may end up replacing furnishings. Be sure to have dehumidification and proper heating and cooling systems in place, too, for greater enjoyment, says Dickinson.

4. Know local ordinances regarding required number and size of egresses, and if you are allowed to outfit a full kitchen.

5. Be sure to leave enough headroom if you add lighting, ducts, or a new ceiling; you don’t want the height to be less than 7’6″ but preferably 8′ high, says architect Allan J. Grant. In new construction, go higher to 9′ to 10′, says architect James Crisp. To dig down to get a higher ceiling may be too expensive, and undermine footings or cause water problems, says Dickinson.

6. Don’t seal off existing mechanical systems, circuit breakers, and future plumbing lines; professionals need access for maintenance and repairs. Soundproofing mechanical systems is a smart affordable fix.

7. Don’t chop up space; better to keep it more open, a trend homeowners desire in main-level living space, says designer Marianne Cusato, author of The Just Right Home (The Taunton Press). But be sure walls removed aren’t load bearing, which may necessitate consulting with a structural engineer, she says.

8. Consider nonwool carpet tiles that are easy to replace and warmer than vinyl, which tends to trap moisture and humidity, says designer William Caligari. On walls and ceilings, use drywall or sheetrock for the same reason.

9. The jury’s out on whether you should furnish a space in a style and quality consistent with your upstairs. Caligari says not necessarily; he renovated his basement as a work-out room for his cycle training. Grant thinks the same quality may improve resale.

10. Be generous with artificial light, especially if windows are minimal. Few homeowners will spend time in a dark space, except for a theater.

11. Consider improving the staircase so it resembles a more traditional open one rather than remain narrow and confined. Paint treads and risers white and use a runner from a carpet remnant down the middle to enhance appeal, says Caligari.

12. Know that even if you don’t need a finished basement, a partly finished room can add value affordably for clothing or wine storage or a place to play ping pong.

13. When a basement presents problems and before you add on, check out your attic if you have one. It can provide expansion room depending on the roofline.

Want advice on finishing your basement? Let us know!

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Written by Lisa Virkus