A finished basement can serve as additional living space and is a popular home-improvement project. But there are certain things to consider before finishing a basement or buying a home with a finished basement. So whether you’re a homebuyer or homeowner, if you’ve wondered whether a finished basement is worth the investment, we’ve got some advice.
Should you take the Plunge? Considerations for Homeowners:
Even seasoned homeowners who have moderate home-improvement skills will find that finishing a basement is a major undertaking. Before diving into this project, you’ll want to determine the average market value of homes in your neighborhood. If finishing your basement puts your home significantly higher than the average market value in your neighborhood, you could have a hard time selling it in the future.
Additionally, ask yourself if the cost of the project is worth the return on investment (ROI) if you were to sell your home. Remember that most finished basements only return up to 70 percent of what it costs to complete the project, according the “2015 Remodeling Impact Report” from the National Association of Realtors.
Should you take the Plunge? Considerations for Homebuyers:
Buying a home with a basement has a couple advantages. The space can be used for storage, but it can also serve as additional living space. If you’re a prospective buyer, you may be wondering whether you should purchase a home that already has a finished basement or one with a basement you can convert on your own.
As stated above, finishing a basement only returns up to 70 percent of what it costs to complete, so you would be wise to purchase a home that already has a finished basement. Not only will you save 30 percent of the cost, but you’ll also avoid all the hard work it takes to complete the project. If, on the other hand, you plan to purchase a home with the intent of finishing the basement, one advantage is that you can design it to suit your living needs, rather than purchasing what was ideal for the previous owner.
Plan, Plan and Plan Some More – Other Considerations
Planning your basement conversion thoroughly is crucial for a successful project. Aside from the obvious costs of walls and flooring, you must factor in the additional costs of replacing windows and doors, moisture and water concerns and rerouting plumbing, electrical or HVAC systems. Ceiling height, necessary building permits and mold or mildew growth should also be taken into account during the planning stage.
Pros and Cons – It’s up to you to Decide
As with any home-improvement project, finishing a basement comes with a variety of pros and cons you should consider. On the positive side, the finished space will increase the square footage of your home. This will be attractive to prospective buyers should you decide to sell in the future. If you’re lacking the necessary property required for an addition to your home, finishing your basement provides a perfect solution to expand your home’s square footage. And, since the basement is already in place, you can increase your home’s living space without the hassle, additional labor and expenses that are common with traditional home addition projects.
On the other hand, you can expect higher utility bills (such as heating) because of the added space. You may also have to pay higher taxes due to the increase in your property’s value. If you fail to plan your project accordingly, you could experience significant cost overruns that could exceed your budget. And, if you convert your basement into a living area, you will lose valuable storage space.
Finishing a basement has its pros and cons for both buyers and sellers. So regardless of which side of the process you are on, make sure you carefully consider all factors and possible outcomes. For more information on buying or selling a home, head to Owners.com.
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