The Finished Basement ~ add value to your home!
Whether you want to add an extra bedroom, a theater or a workout room, the basement gives you options that you otherwise wouldn’t have – unless you wanted to add an above-ground addition to the home, which would be more expensive. Besides adding space, a finished basement could also increase the value of your home.
The finished area in the lower level of your home will add value to the price of your home; it just won’t be the same as above grade space on a dollar per square foot basis.
While the value added to your home from finishing your basement may not be as much as you were hoping for, you will save money by adding living space under the house as opposed to above-ground. Building an addition above-ground is expensive, while the basement already has a floor, walls, wiring, plumbing, and a roof – making it relatively affordable to renovate.
How Finished Basements Are Valued
When an appraiser considers the value of a home, he or she needs to make apples to apple comparisons – which means that living space above-ground is valued separately from space below-ground. Space above-ground is worth more. This makes perfect sense as the cost of finished basement space is far more inexpensive to add than above grade living area.
If there is a home similar to yours with the same square footage, similar features and in the same neighborhood, the value of both homes would be somewhat equal. But if a quarter of your square footage is in the finished basement – underground living space – then the value of your home would be less than the home with all above-ground square footage.
You can find various estimates of the value of basements, approximately 50% of the above-ground value. While these estimates are useful to get an idea of what your finished basement will be worth, you will need to talk with professionals working in your particular area to get a clearer picture of how much value you can get from your renovations.
Types of Basement Space Have Different Values
The kind of finished space in the lower level of your home can have an enormous impact on the value a buyer will be willing to pay. Essentially there are three types of grading on a home site that will determine the value in which you can get out of a finished basement. The three kinds are:
A full walk-out basement – this is the most valuable type of living space because you can have regular size windows, sliding glass or atrium door. A full walk-out basement allows you to have a significant amount of natural light. With natural light, a finished lower level often does not feel like a basement at all. The other benefit of a full walk-out basement is to be able to exit the home through a regular door and not a bulkhead. The walkout basement often allows for a great area to have a beautiful patio and other landscape features. You can see some great examples of walkout basements at Houzz.
A partial drop in grade – with this set up you are still able to have some full-size windows. However, you may or may not have the ability to have a full-size door. The grade of the land does not allow for it. This type of set up is not quite as attractive as a full walk-out lower level. The other term used for this situation is a garden level lot.
A non-walk-out basement – this is the least attractive type of basement space. You have four concrete walls and no natural light other than through some tiny standard basement windows. Never under estimate the value of having natural light in a cellar area!
If you are considering finishing your basement make sure that you plan ahead for any water or moisture issues. One of the biggest nightmares you will deal with is pouring a ton of money into your lower level, only to find out you have a water problem. Take the time to seal any foundation cracks and if need be install French drains or a sump pump if necessary. Spending the money on these items is the kind of insurance that is well worth it! Lastly be sure to take out a construction permit for work done on your basement. Your home will be much harder to sell when it comes time to sell and you may even find that the local inspector makes you rip out walls!