Return on Investment: Finished Basement
Basements are a forgotten source of extra square footage in many homes. A finished basement can provide a little privacy or create space to spread out in an open concept home. When done well, a finished basement can be a great amenity for any family home. Though additional space can improve the day-to-day lives of homeowners, for investors, do they actually add value to a home? Let’s learn more about the return on investment you can expect when adding a finished basement to your property’s floorplan.
Cost vs. Value Report
The 2016 remodeling magazine “Cost vs. Value” reported that the average basement remodel cost approximately $60,000. The expected return on investment was found to be 70.3%, one of the highest ROIs in the survey.
To achieve this impressive ROI, follow these best practices:
#1 Check for signs of moisture or foundation cracks before you invest in finishing your basement. Addressing these issues before you modify the space will ensure best results.
#2 Understand local building codes before you finalize your layout. If you are adding bedrooms, be sure they have the proper egress.
#3 Keep your layout simple. The more walls, the more structure you have to add. Many basements have posts that support the entire structure of the home. Do your best to work around these. Incorporating the existing structure into the design can cut many unnecessary costs.
#4 Calculate your ceiling heights. For the basement to feel like part of the rest of the home, the ceilings will need to be at least 7.5 feet high. The ideal height is 8 feet, and in some new construction areas, basement ceiling heights are closer to 10 feet.
#5 Invest in good lighting, especially if windows are scarce. No one wants to spend time in a dark space, and if you don’t have a daylight basement, there can be a shortage of natural light.
If done properly, a finished basement can add value to any home. Whether you are adding a basement to your home or to an investment property, if you do it right, you can expect that 70% return on investment.