Is Finishing Your Basement Better for Resale Value?
A finished basement can be a huge selling point for a house—sometimes. See what experts have to say about the ins and outs of finishing a basement.
Basements are typically built and designed for the storage and housing of your home’s HVAC and plumbing systems. But more and more, builders and homeowners are finishing the spaces to add home gyms, entertainment caves, and playrooms. Having a finished basement can be a perk both for your lifestyle and for resale purposes.
“Basements are excellent candidates for refinishing; they are a great way to create more usable space in a home,” says Eugene Colberg, principal at Colberg Architecture.
But if your home’s basement wasn’t finished when you moved in, deciding whether to take on a project of this scope can be a bit daunting. These experts weigh in on how to determine whether a project of this scope is worth it for you—and your home’s value.
The Possibilities of a Finished Basement
Basements—or subterranean spaces, as they might otherwise be called are almost always fully or partially underground. Some basements, called walk-out basements, might be set into the ground at the front of the house but offer walk-out access to the yard from the rear of the home, but a traditional basement will be predominantly underground.
Most unfinished basements feature concrete floors and open studs as walls—no drywall in sight. Your basement might have a direct line of sight to your hot water tank or sump pump, as well. It’s likely you have a corner piled with boxes of Christmas decorations and the kids’ elementary school art.
A finished basement, on the other hand, usually features upgraded walls, flooring, and lighting, plus decor comparable to what you’d see upstairs on the main floors of the home.
Lower levels are often divided into multiple spaces to serve different purposes. We often see a main entertaining area with features such as a wrap-around bar, large scale sectional seating, and a movie projector for gathering with family and friends. Areas off of the main space may be devoted to other activities such as a gym, a billiards room, an office space, a wine cellar, or perhaps a craft or gift-wrapping room.
Uses for basement rooms are nearly endless, and finishing the area allows for additional living space overall. Some homeowners choose to add more unique features, as well. Colberg says he’s seen the addition of useful rooms such as kitchens and bathrooms to basements, plus more high-end spaces like saunas and steam rooms.
Deciding to Finish Your Basement
Colberg says, before you get your hopes up, there are two major considerations for making the decision to finish your basement: the potential for flooding and the ceiling height in your basement.
“These are the two key things that really impact what you can do,” he says. “If you live in a flood-prone area, then it’s not worth refinishing. If you don’t have the height, you can’t do much. These two factors are the two threshold things which will help you decide whether the project is a go or no-go.”
From there, you’ll need to consult with your local government to see what’s allowed for a project like this in your area.
“Because a basement refinishing is mostly or completely underground, and don’t necessarily have the capacity to open windows, take infrastructure into consideration,” Colberg says. “You may need to install underground plumbing, which can be a challenge. Most building utilities are located at that level, so there are challenges in maneuvering around the electrical and mechanical rooms, piping, and other components. The basement might not be the most valuable space from a real estate perspective, but it’s where the house’s critical systems are.”
We’ve mentioned drywall, flooring, and lighting as requirements for a finished basement, but remodeling this portion of your home even more involved—definitely more so than a main level room. That’s because basements are prone to water problems and often contain the home’s core systems.
Buyers and home inspectors are always concerned about flooding in a basement, so this is an important element to address in a basement.
That might mean having a sump pump added or having French drains installed in the yard to move water away from the home. In most cases, you’ll also want to add a dehumidifier to remove water from the air in the basement, preventing mold and mildew.
You’ll also need to insulate the basement, primarily for heating and cooling—but also soundproofing. “Imagine Jurassic Park movies streaming downstairs while you and your partner enjoy a quiet glass of wine on the main floor of your home next to the fire.
Finally, you’ll want to consider the cost of a project of this scope. That can vary wildly depending on where you live and how much you plan to change the space.
“It varies tremendously based on such factors as scope of work, your municipality, the size of the basement, whether or not you need to excavate, or if the basement requires features like sprinklers, an ejector pump, the installation of a kitchen, or simply paint,” Colberg says. “You could say that the cost would be on par with any other residential-type renovation project.”
Estimates for finishing your basement can range from $2,000 to $50,000 and beyond.
As you decide whether to finish your basement, Colberg suggests examining your reasons for wanting to tackle this kind of project.
“Like you weigh the other pros and cons of any home improvement project, identify your budget, determine the needs of the project, and understand if this is a necessity project versus something that is for vanity—which is fine!” he says. “These factors will help you determine the pros and cons of moving forward with a basement refinish.”
Start by contacting pros in your area to get estimates for the type of work you’re looking to do and go from there.
How a Finished Basement Can Impact Resale
A finished basement will almost always add value to your home when you list it on the market, but a finished basement with water problems can be a major deterrent for buyers. Maintenance of your finished basement is a top priority if you’re looking to make this addition.
Humidity control is important, mildew can appear on fabric if not addressed.
In some parts of the country, adding heated square footage with a finished basement can add to your annual property taxes—not to mention your utilities. In other words, this space isn’t just a free bonus for the next buyer, or for you, even after the cost of finishing the basement but you can add to your property value overall by enhancing this space.
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