When you travel down the stairs and into your basement, what do you see there? Is it a place that fills you with joy, or does it look a bit more like the set of a horror film? If the walls and floors are made of concrete, the pipes are exposed and the air is damp and musty, it may be time for you to start thinking about finishing your basement.
Homeowners tend to drag their feet when it comes to finishing their basements because they view the empty space as a place to hide their unused furniture, seasonal clothes, decorations and sentimental knickknacks. However, your basement can be so much more than an oversized storage unit.
Transforming the dingy underbelly of your home into a livable space may sound like a drain on your time and money. But if done correctly, finishing your basement can increase both your enjoyment and the value of your house.
Why Finished Basements Are Worth It
Although you may feel that your family can make do with the current square footage of your home, would you turn down another 600 square feet or so if it was offered to you?
Think about what you could do with that space. Basement space has the benefit of being away from the rest of your living area, which means that whatever you put there doesn’t have to be seen or heard by everyone else in your home.
“By increasing the usable square footage of a home, you gain value and function that is untapped,” says David Schneider, Principal and Lead Designer of PURE Home Design. “There is also a potential that the finished basement will create an income stream, provide space for a growing family and provide accommodations for short and long-term guests that will not disrupt the flow of life on the main floors of the home. But mostly it provides added comfort and functionality for the homeowner.”
By clearing out the boxes, waterproofing the space, insulating the walls, installing drywall and adding water-resistant or easy-to-remove flooring, you can start to turn your unfinished basement into an area your family and guests will want to spend time in.
If you feel that the costs of finishing your basement aren’t worth the added space, you should consider how the remodeling will influence the value of your home.
“When done well, a finished basement will add significant value to your property. On average, a finished basement will give you a 75% return on your investment. In areas where extra living space is in great demand, this will be even higher,” says Katie DeWeese, an interior design, remodel and redesign specialist.
If you decide you want to finish your basement, you want your work to pay off. Therefore, you must consider what will make the best use of the space.
Ideas For Finished Basements
The possibilities for your finished basement are endless. Especially when you don’t need the added square footage, you can get extremely creative when deciding the new purpose of your lower level.
John Judd Jr., a co-owner of Judd Builders, a custom home builder and remodeler in Asheville, N.C., explains,“We've had clients put in bars, a virtual reality area, a golfing area, gyms, game rooms, safe rooms, secret rooms, wine cellars and humidors.”
Although you may think it would be cool to have a putting green or a wet bar in your basement, you should think carefully before making a decision. The best ideas for finished basements tend to be the simplest.
Remember, you may not be living in your home forever. If there comes the point that you decide to sell your house, you’ll want to be sure that your finished basement provides you with the return on investment that you were expecting.
“A finished basement has the potential to add value to your home. However, the finished basement should be directed to adding value to the majority of buyers – therefore, do not customize the space,” says Ashley Baskin, licensed real estate agent and advisory board member of Home Life Digest.
So as you decide how to finish your basement, consider how the average person would want to use the space. The choices you make during the remodel will only increase the value of your house if your basement is aligned with what future home buyers will be looking for.
Playroom Or Media Room
If you have a growing family, you know that one living room doesn’t always feel like enough to suit the disparate wishes of every family member. Whether it’s wars over TV time or multiple playdates at once, there are often occasions when you may feel that you need two family rooms.
Turning your basement into a playroom is a great idea when you have young kids in the house as it provides them with space where they can frolic and make as much noise as they want without creating any disturbance. Furthermore, when you create a playroom, you’re also establishing a space where your kids can keep all of their toys and games. So you’ll finally be able to get your kids’ clutter out of the living room and even straighten up their bedrooms a bit.
Creating a media room in your finished basement is another good use of space as it allows you to recreate the cinema experience from the comfort of your own home. Brett Elron, Owner and Head Interior Designer at Barter Design, explains, “Basements are great for media rooms because they have separation from the rest of the house so you don't have to worry as much about noise. They are generally darker, which makes it great for movies.”
By transforming your basement into a playroom or media room, you can confine all loud activities to the lower level and keep upstairs tranquil.
If you’re busy throughout the day, it can be hard to find time to go to the gym. Instead of sacrificing your shape to accommodate your hectic schedule, you can convert your finished basement into a personal gym. Having a gym in your basement will enable you to squeeze your workout regime into your daily routine painlessly.
The basement is the perfect space to keep heavy weights and bulky gym equipment, which could do damage to upper floors. And if you add a sound system or TV, you’ll be able to keep your mind off the burn.
Given the fact that society has become much more concerned with health, personal gyms are an easy sell to future buyers. Just make sure that you have proper ventilation. You’ll need to have central air or an overhead fan to keep cool air circulating through the space.
Guest Bedroom And Bathroom
If you have a lot of visitors or in-laws that seem to spend more time in your home than they do in theirs, adapting your finished basement into a guestroom and bathroom can save you from quite a few headaches. With a spare bedroom and bathroom you can create a private space for guests and not have to worry about them invading your home.
Homes that have few bedrooms and only one or two bathrooms tend to be less attractive to home buyers. By adding an extra bedroom and bathroom to your house, it’s more likely that you’ll eventually see a return on your investment.
But even if you don’t plan to sell, creating a studio apartment in your basement can lead to a useful income stream. Elron explains, “I have had a client which had a basement with a separate entrance, and they finished their basement as a bedroom and bathroom and ended up using this as a rental space for a family member. Not only were they able to increase the number of bedrooms and bathrooms in their home, but they were also able to earn rental income!”
While you may not have a family member in need of housing, your finished basement can still be a source of income. Basements that have a separate entrance are the perfect place to add a bedroom and bathroom because they give you the option of renting out the room through online marketplaces like Airbnb.
How Much Does It Cost To Finish A Basement
When you’re considering finishing your basement, the cost is always usually a concern. You want the quality of your remodel to be good enough that it adds value to your home while still being affordable enough to provide you with a decent return on your investment.
The costs can vary greatly depending on the square footage of your basement, the extent of your project, the quality of your finishes and even the location of your home.
“On average, it will cost between $30 and $50 per square foot to finish a basement. The wide range depends on the market where the home is located as well as the finishes chosen. Adding walls for bedrooms will cost more as will adding plumbing for bathrooms or a wet bar,” says DeWeese.
So if you’re looking to finish a basement that’s 600 square feet, you can expect to pay around $18,000 – $30,000 to complete the work.
“A basement project will cost substantially less if the space is all open, is already prepped and waterproof or if the homeowner does much of the work themselves. However, more detailed and expensive finishes will also give a greater return on the home,” DeWeese adds.
How To Ensure Finishing Your Basement Adds Value
Finishing a basement isn’t a cheap task, but it can provide you with strong returns that offset the costs. You just have to make sure that the work you do adds value to your home. This means ensuring that your finishes are tasteful and that your plan for the basement is of interest to potential home buyers. But how do you guarantee that your finished basement will be widely appreciated?
“The space must make sense and feel like it integrates with the main floors of the home,” says Schneider, adding that you should be able to enter the finished portion of the basement from your first-floor staircase.
The work that you do on your basement must make your entire home feel unified. That means that the journey down to your finished basement must be as polished as the room itself.
No one will want to use the finished space if they’re still greeted by concrete and exposed ductwork on the way there. In order to add value to your home, all visible and readily accessible parts of your basement must be finished.
According to Elron, your finished basement will lead to a return on your investment if you base your budget on the current value of your home. “Generally during a home appraisal, basement square footage is valued at 50% – 60% of the value of the above grade square footage (the rest of your home), so by keeping your basement budget under 10% of your home value, you'll ensure that it's adding value and not costing too much,” he says.
To finish your basement and recoup the costs, check the value of your home before you begin the planning stage. If your home is valued at $350,000, you shouldn’t be spending more than $35,000 on your remodel.
If you’re ready to finish your basement but are worried about coming up with the money, consider taking out a personal loan. However, if you’re still working to pay off your primary mortgage, you may prefer to use the existing equity in your home to help you finance the work.
By applying for a cash-out refinance, you can free up the funds you need to finish your basement. The best part is that the money you take out will be used to increase the value of your home, so you’ll be increasing your equity even as you cash out. To find out more about your options, apply online or call (800) 785-4788 to speak to one of our Home Loan Experts.