Investing in a finished basement can give your house a real boost, especially in terms of its resale value. Instead of the damp, dark basements of the past, modern homes are expected to have basements that are not only neat but also fully functional. As such, the most valuable benefit of basement renovation is the addition of usable space in the home.
For a family who could use the extra living space, whether it be for a spare bedroom, a family game room, or a home office, finishing a basement adds incredible immediate value to the residents. The resulting increase in home value is another added benefit should they wish to resell the house down the road. Following a successful basement renovation, the total value of the house should increase by seventy-five cents for each dollar spent on the project.
How Appraisers Evaluate Finished Basements
Appraisers evaluate finished basements differently from above-grade basements. This is because basement square footage is typically not included in the total square footage of the house but is listed separately as basement space.
Depending on the area, a real estate appraiser will generally estimate the value of finished basement space at 50 to 60 percent of the value of the above-grade square footage. Still, in a competitive real estate market, a buyer may fall in love with the basement space, and the actual home value — the price the buyer is willing to pay — will certainly increase.
Factors That Will Affect ROI
Not all finished basement ideas are created equal. A basement apartment that has its own entrance will add much more value than an open playroom with no bathrooms or windows. A fully furnished basement will thus likely get a larger return on investment for features that make it both aesthetically pleasing and functional.
Basements generally do not get many natural light sources, so investing in functional lighting will make the entire room seem larger, cleaner, and more comfortable. Adding a bathroom will likewise increase the basement’s value substantially, but this can be an expensive addition depending on the layout of the plumbing in the home.
Deciding whether to leave the ceiling exposed or close it up with drywall can also factor in the final home value. Closing up an exposed ceiling can give the room a modern feel, but if you decide to do it, don’t forget to put access panels in for the water shut-off.
The most significant factor in computing the total value of a house after a basement renovation is the local real estate market. When given the choice between a home with a finished basement and a home without one, many aspiring homeowners are going to bid on the house with the furnished basement. In a buyer’s market, the basement space might just make all the difference in getting an offer on the home.
Another factor that can affect the return on investment is the choice of materials used for flooring and insulation. While hardwood floors are beautiful and provide a solid selling point for the above-grade part of the home, they could be a big mistake to incorporate in a basement.
A basement that is not sufficiently insulated from moisture will show signs of water damage and mold, deterring future buyers. Fortunately, technology has advanced so that a basement can be effectively insulated from moisture. Some protective materials also help insulate against sound, making them perfect for basements that are remodeled as recreation rooms, where a sound barrier provides a tremendous benefit.
Tips to Get Started
At BCR Basement, we offer a complete turn-key service with no hidden costs. Our expert designers are ready with ideas to help you transform your basement into something that will effectively increase the resale value of your property.
To get started on your finished basement, call BCR Basement 647-774-4589 or visit our website, where you can canvas the cost of different types of renovations and explore a gallery of our previous work.