Basement Finishing: What is the Return on Investment?
Finishing the basement has always been a great way to add value to a home. Far more than just extra space, a finished basement is a playground of sorts for the entire family. It can be a play area for the children, a movie theater, a home office – there are innumerable uses for a basement that has been professionally finished. But, did you ever wonder whether basement finishing has a specific return on investment (ROI)? In other words, to what extent does a finished basement add to the value of a home, and is it always worth the cost?
The editors at Remodeling magazine have sought to provide answers to these important questions. In its latest Cost vs. Value Report for 2013, which is available here, Remodeling reports that basement finishing can increase the resale value of a home by approximately $45,000. Assuming a job cost of $56,000, this translates into an 80 percent cost recoupment. Stated differently, you will be able to recoup 80 percent of the money you spend today finishing your basement when you decide to sell your home. The “average” basement used for this report has a 20-by-30-foot entertaining area with wet bar, 5-by-8-foot full bath, closed off mechanical area, painted drywall throughout, hardboard doors, and all electrical rewired to code. In Charlottesville, VA, basement finishing yields a cost recoupment 10 percentage points higher than the national average!
Other projects with high cost recoupment include attic-to-bedroom conversion (79 percent), wood deck addition (83 percent), entry door replacement (92 percent), and garage door replacement (79 percent).