Does a Finished Basement Add Value?
For the short answer, yes, finishing your basement will add value to your home.
Unfortunately, as per everything in life, the answer really isn’t that simple; because after this question comes a barrage of other questions: how much is my home worth after finishing the basement? Is it worth the time, effort and capital that I’ll need to put into it?
If your intent is to get a return on your investment, don’t go ahead and finish your basement just yet though. As homeowners, wishing to sell to house buying companies or just a regular residential buyer you must ask the right questions. The question(s) you want to ask is:
- Is finishing my basement the best way to increase the fair market value of my home?
- Is it the best way to get the most out of my investment?
More often than not, the answers to those very specific questions are no; and this is why I said, it’s really not that simple.
Why You Should Finish The Basement.
Our advice is, if your intent isn’t to sell your home, then make the most of that square footage in your basement. Finishing it will add value to your home and you, and your family, can enjoy the finished space. If your intent is to sell in 5 or 10 years, then, that finished basement really is worth it. It is worth it because when the time comes to sell your home, you’ll get a financial return, but the best return would have been from all the memories you created in that new living space, with your partner, your pet, your children, your friends, your extended family, etc.
What is the Return on Investment of Finishing my Basement?
While we have now come to the conclusion that a finished basement will add value. Let’s talk about the better option for home improvements and why it’s better.
A finished basement can fetch you, as low as, 52.8% return on your investment and only goes as high as 86.4% in states like Hawaii, California, Washington, Oregon and Alaska. We can’t speak for you, this is our own opinion, but as a company who buys houses for cash (one of the companies who buy ugly homes and renovates them) well, let’s just say, we think a 52.8% return is too low.
What else can I do to add value to my home?
The best way to get the most out of your investment is to improve an above-grade space (this is a space that is above ground level, not underground). A basement or living space that is located underground or below street level is considered to be below-grade square footage. It is also good to bare in mind that below-grade living space is usually only worth half of the price per square foot in your area. Your gross living area will not include your below-grade square footage.
You could also consider updating the plumbing.
An appraiser will value your home based on homes with similar square footage in your area, and your below-grade square footage won’t be included as valuable in that comparison.
We buy homes for Terms OR cash fast in North Carolina and South Carolina.
If you’re interested in selling your home or wondering “How much is my home worth?“, reach out to us so we can send you the highest offer on your home.