When plunging into home renovation projects, homeowners’ most common question is, “Will it be worth it?” The answer depends on many factors — primarily, how you define the question. Do you plan to stay in the house for a long time and want to know if the changes will benefit your family, or do you intend to sell in the not-too-distant future and want to know you’ll get your money back?
Most people renovating their homes are a mixture of the two. They want to balance the value a project would give their family with seeing a reasonable return on investment in the future. No matter which camp you find yourself in, you should look at the costs, average return on investment (ROI) and important considerations to help you make an informed decision.
How Much Does It Cost?
Basement renovations range drastically, from $3,000 up to $80,000, with an average of $18,400. The final number will depend on the finishes you use and how extensive your upgrades are. For example, flooring could cost upwards of $12,000 for more expensive options, but you could save significantly by simply finishing a poured concrete floor.
Ceiling options are another major contributor to the budget. Sheetrock and drop ceilings have advantages and disadvantages, but they both carry a high cost. Alternatively, you could leave the ceiling entirely open and paint the rafters a uniform color.
The current condition of your basement and the amount of square footage are two other crucial factors. Before deciding whether finishing your basement is worth it, have a general contractor give you an assessment and estimate for the project.
What Is the ROI for a Finished Basement?
The national average for ROI on a finished basement sits around 70%. This will depend on several factors, including the location, level of craftsmanship, design and functionality. However, the primary aspect for resale is whether your finished basement can be counted toward livable square feet.
Every state has different laws about what does and does not qualify. Typically, the ceilings must be at least 7 feet with all the necessary utilities, have finished walls, feature at least two points of egress, and include functioning smoke and carbon monoxide detectors.
Even if you don’t meet your area’s standards for livable square footage, a finished basement is an update homebuyers like to see, helping your house move faster on the market. You’d want to ensure you draw attention to it in the future listing description and add plenty of pictures.
Considerations With an Old Basement
An older home can change the game when finishing a basement. You’ll have more considerations that could affect your project’s final cost and success.
All basements are prone to excess moisture, but especially in older homes. Water has many opportunities to get in and cause problems if your house has the typical dirt and stone construction. Suppose you don’t have methods in place to regularly remove moisture from the air and excess water from the ground. In that case, you’ll need to put extra money into a sump pump, dehumidifier and possibly trenches for better drainage.
Even if you carefully maintain your living space, you may have unknowingly neglected your basement. As homes age, their foundation becomes more prone to stress cracks, sinking and other common basement problems. You’ll need to have an engineer check the integrity of your current structure before moving forward. Setbacks in this area could break your budget before you get started.
You’ll need to obey minimum ceiling heights to get the permits to finish your basement. In most cases, your completed basement must have a head clearance of at least 7 feet. If you don’t meet that right now, you’ll pay extra to have your floor lowered or your home raised.
To bring your basement up to code, you’ll also need to include at least one form of egress, like a walkout door or a window large enough for a firefighter to fit through. If you don’t have any emergency exits in place, you’ll have to pay to have one installed.
Is Finishing Your Basement Worth It?
Only you can decide if finishing your basement is worth the investment. An ROI of 70% isn’t bad, but if your only reason for completing it is for resale, it may not be the most important project to tackle. However, buyers might appreciate the addition and be more willing to look at an older home with a finished basement. You may not see an increased price for your house, but the turnaround could be faster.
If you’re hoping to stay in your home for a while longer, the most important part of deciding to renovate your basement is probably the value it can bring you right now. Do you have children who could use it as a play space? Do you need an office or a spot to work out? These are just a few things to consider when finishing your basement. It’s an extensive project, but the result can add much value to your life and home.