Let’s talk about increasing your home’s resale value through a finished basement. This is something that’s often ignored or not considered when it comes to valuing a home. However, basements are becoming increasingly popular for several reasons and could greatly increase your home’s resale value (with a few improvements, of course). Let’s talk about these improvements, explain why they’re important and how they can increase your home’s resale value along with some tips we think you might find helpful.
Increasing your Home’s Resale Value through a Finished Basement
In the past, basements were often used for children to play, adults to have extra space for activities, add a bar, do laundry, or in more complex versions construct a man cave. Then, basements started becoming less popular — many considered them too dark and off-putting, and unlikely to yield much return on investment.
As housing sales decreased in recent years and many homeowners decided to stay put rather than move and deal with rising home prices, they started to notice that their neglected basements had potential to be made into living space, with improvement, and for less than improving space on their first floor.
Actually, many architects and contractors used the cost savings of remodeling a basement compared to an addition of the home at up to half of the costs, depending on the improvements, location, and costs of hiring among other factors. Also, the improvement could be what sells, and not making any improvements might be the difference between the sale or not, says many realtors. Finished basements – they’re in.
The latest annual “Cost vs. Value” report from Remodeling Magazine put the average basement remodel at $61,303 with a 70.3 percent return, which scoots it to the top of the list of remodels when it comes to budgeting, along with a small kitchen remodel, an attic bedroom, deck improvement, and a newer entry door.
13 Tips to Improve Resale and Cut Costs
- If you’re concerned about payback (who isn’t?) choose improvements that appeal to a wide range of people. Such as casual living room, home office, or extra bedroom, say real-estate agents. Walkout basements are also a plus if your property allows for it. Understand your clientele with families. Some children may not want to use a downstairs playroom unless an adult or friend will keep them company, says many designers.
- Know that the value of underground space is worth around half of what lies above—around $250 a square foot versus $500 in most cases, according to the professionals at Lending Tree Home Pros, which provides lead generation for borrowers and contractors. Their 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. If money isn’t a concern, though for most it is, go ahead, such as clients of architect Chris Pagliaro of Pagliaro Bartels Sajda did in changing theirs with gym, pool table, bar, spa, sauna, bathroom, virtual golf, and access to an outdoor kitchen and plunge pool.
- Know your local ordinances regarding the required number and size of egresses, and if you are permitted to add a full kitchen. Some towns actually have certain regulations concerning the size and number egresses, so you’ll definitely want to square that away.
- If your basement shows signs of water entering or moisture—foundation cracks, for example, address those problems first with a sump pump, French drain, or backup generator. Otherwise, you may end up having to replace valuables. Make sure to have dehumidification and proper heating and cooling systems, too, for greater enjoyment.
- Be sure to leave enough room if you plan on or are considering adding lighting, ducts, or a new ceiling; you don’t want the height to be less than 7’6″ or more than 8′ high, according to professionals. When new construction is being done, go higher to 9′ to 10′. Digging lower to get a higher ceiling may be too expensive, and you may even sabotage footings or cause other problems, such as water leaks. Trust us, sabotage is something you want to do to others, not yourself.
- Don’t seal off previous mechanical systems, circuit breakers, and possible plumbing lines; workers need access for maintenance and repairs. Having mechanical systems soundproof is a smart and affordable fix to what could otherwise be an expensive method.
- Don’t divide space; it’s better to keep it more open, a trend homeowners want in main-level living areas, say designers. Be sure walls removed aren’t load bearing, which may be worth speaking with a structural engineer.
- Consider non-wool carpet tiles. They’re easy to replace and warmer than vinyl, which tends to hold moisture and humidity. On walls and ceilings, you’ll want to use drywall or sheetrock for the same reasons.
- It’s still unclear, due to the array of preferences on whether you should stay consistent in a style and quality consistent with your upstairs. Some people think the upstairs should look completely different from your downstairs, while others feel the style should be homogenous throughout. Since there isn’t a true consensus, you can make the call.
- Be generous with artificial light, especially if there are few windows. Not many homeowners will want to spend time in dark spaces. Let’s be real, would you?
- Know that even if you don’t personally feel you need a finished basement, even a partly finished room can add affordable value for clothing, wine storage, or a place to enjoy recreational activities like table tennis.
- Consider renovating the staircase so it reflects a more traditional staircase, rather than narrow and confined one. As well, to enhance the overall cohesiveness, you should use white paint trim and a carpet runner down the middle of the stairs.
- If your basement shows problems, and before you commit to an add-on, check out your attic if you have one. It can give expansion room if your roofline allows for it.
Basements are becoming increasingly popular, and buyers are considering them as a part of their investment when they are deciding to purchase a home. With just a small investment for improvements and creativity, you can greatly increase your home’s resale value and your chance to seal the deal.