Most people who own unfinished basement spaces in their houses are often indecisive about what to do with that space to add value and style to their homes.
For homeowners who do not plan to sell their house anytime soon, the decision is pretty easy.
They’d do anything to develop, finish, or renovate their basement as long as they get as much personal value from it.
For others who might be looking to sell off their property soon, the wavering thoughts about what to do to their lower levels pose a serious nightmare.
Most of their worry though is centered around how much financial value they’d get in return.
Know that basements are evaluated differently from above-ground space — main level and all levels above that.
So, how much value does a basement suite add?
A basement suite ultimately increases the personal and monetary value of your house. In fact, the finished basement ROI is quite significant — 70 to 75% in most cases. According to remodeling, the national average cost of remodeling a basement at $43,112 with an average return of $33,911, or 79%. The appraised value of a finished basement suite is around 50% to 60% of the value of the main level square footage.
However, we have to point out that basements don’t offer as much value as other under-roof living spaces, such as above-grade bedrooms and main-floor living space.
When set up nicely, a basement adds a sizable amount of living space or an extra room to your property.
One can easily convert a basement into a living room, home office, mother-in-law suite, or a mini-apartment. After all, those are some of the creative ways to put all that extra space to good use.
However, when faced with the financial burden and time strain of developing or renovating your basement, you might find yourself questioning your sense of judgment.
- Does adding a basement suite increase the value of a home?
- How much value does adding a basement bathroom add?
- Does adding a bedroom in the basement add value?
- Does basement square footage count for appraisal?
These questions are valid, but let’s find out which of them really matters the most.
By the way – before we get too far along here, if you want to connect with other homeowners and builders and get more great ideas for your home to make your space the best join my free private Facebook group, Remodel Reality here.
Does Adding A Basement Suite Increase The Value Of A Home?
Yes, setting up a finished basement apartment can add value to your property.
However, you might not be able to recoup the financial investment made especially in the short term. That’s the case more often than not.
Finished basements give homeowners an extra livable room that could easily serve as a guest room for visiting relatives or a viable source of rental income.
For context, research estimates that owning a finished basement in the U.S. can potentially grow the value of your home by up to 70%.
Simply put, investing a “token” of $1,000 to furnish your basement will increase the value of the property by $700. That extra quid will surely come in handy during negotiations if you plan to sell your house
However, renting out or living in a basement apartment is generally illegal, save for those situations they meet the building code standards for livable spaces established by your local government.
Nevertheless, this has never deterred most people from doing so anyway. In New York alone, more than 150,000 people live in lower-level apartments.
A finished basement with a separate entrance will add much more value than a simple unfinished basement.
Here’s a table depicting what the average cost recouped for a basement remodeling project will look like in some states:
|Los Angeles metro
The amount of monetary value you’ll earn by finishing the basement apartment is considerably dependent on some other factors.
Real estate analysts will be looking to consider the actual value of the main living area of the building, the size & ceiling height of the basement area, the quality and cost of the finishing, and other notable features.
Can You Increase The Value Of Your Basement Suite?
What if your basement already has some sort of usefulness, but you’d like to dig in further and get more value?
That’s possible, although you need to bear in mind that you might never be able to get as much value from your basement as you would with the main-floor living space or above-grade bedroom.
However, if your mind’s made up, then you should give it a try.
Basically, there’s a simple trick behind increasing the value ratio. The more your basement is designed to look more like a natural living area, the higher the value you’ll get from it.
But then again, these efforts will not yield as much value if your basement has super-low ceilings and inadequate natural light sources.
So before you embark on the project, ensure that you calculate the value you’ll get from it.
Does Basement Square Footage Count for Appraisal?
Despite being a livable space, sometimes realtors, agents, and appraisers will not fully consider a finished basement – especially if the basement is completely below ground level.
Additionally, in some instances, it is required by zoning laws for a basement to have a separate entrance and exit to qualify for a square footage count.
This is partially a measure for safety as fire, and other emergencies require a good exit point from the basement area.
One of such situations happened last September in New York City.
Heavy rainfall and flooding from Hurricane Ida swept through eight states, killing a total of 40 people. Unfortunately, at least 11 of those casualties happened in a basement.
How Much Value Does Adding A Basement Suite Bedroom Add?
When done properly, remodeling your vacant basement into a bedroom should most likely result in an increase in the value of the main living area by more than 6%.
Additionally, you can easily put up a finished basement for lease and get revenue – that’s if your basement meets the standard requirement.
Furthermore, keeping the cost of remodeling and improvements at a basic minimum will effectively increase the value of net income.
If you’re handy and don’t mind taking up some of the major remodeling jobs, you might just be able to save a decent amount of money.
Nonetheless, you’ll still need to employ professionals for technical jobs such as plumbing and electrical work.
How Much Value Does Adding A Basement Suite Bathroom Add?
Every home improvement project comes at a variable cost. Therefore, the value realized from setting up a basement bathroom ultimately depends on the location and value of the building.
According to data from Opendoor, remodeling your basement into a full bathroom might result in a 5.7% increase in the value of your house, depending on where the property is situated.
Can You Use Basement Suite As A Rental Unit?
A major advantage that a finished basement offers is that it can be put up for rent to yield extra income.
Although leasing a basement would have to be approved by the zoning department in your town, some might require at least two forms of egress.
However, renting out a finished basement will increase the value of your property and earn you a sizable income from what used to be a dormant space.
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