Tips & AdviceDoes Finishing My Basement Add Value to My Home?

Does Finishing My Basement Add Value to My Home?


A newly finished basement can give you more than an expanded living space. In some cases, a remodeled basement also adds to the resale value of your home. Before undertaking this significant renovation project, take your time to budget and plan.

Similar to a blank canvas, an unfinished basement can transform into a wide range of potential designs. Sometimes, as your family grows, you may naturally fill up more space to comfortably accommodate everyone. You could also have a specific reason for finishing your basement, such as needing a designated place to work, exercise, or watch movies in a home theater.

How Much Value Does a Finished Basement Add?

For basements in particular, the return on investment gives a homeowner a high potential to recoup some of their costs. In the 2022 Remodeling Impact Report, the National Association of the Remodeling Industry (NARI) and the National Association of Realtors (NAR) measured that homeowners can recover 86% of the accrued costs from converting a basement to a living area. This cost recovery translates into the estimated amount of money reflected in the sales price when completing the project.

Many homebuyers prefer to purchase a property with a finished basement, making this renovation advantageous for sellers. The demand for a finished basement will vary by location and home style. For example, in a one-story ranch-style home in San Bernardino, buyers may seek out a finished basement to increase their amount of living space.

When Does a Finished Basement Add Value?

Ask yourself what value you hope to derive from your finished basement. Homeowners can tailor this project to a particular goal, such as increasing sales value. At the most basic level, a finished basement adds value by increasing the living space. You may not need to do much more than that to get the highest return on investment when looking to sell a home. Someone who plans to sell their home in the coming years may opt for a less expensive remodel with plain features, whereas a homeowner who plans to live in their home for a while may cater the basement more to their specific desires. For example, finishing touches like a bar, in-home theater screen, or work-from-home built-in shelving can make a room more specific to the owner.

Homeowners who do not intend to sell their home in the near future will receive personal enjoyment as a form of value until they eventually put their home on the market. Therefore, they should cater the remodel to increase their satisfaction.

What Are Homeowners and Homebuyers Looking For in a Finished Basement?

After determining the intended purpose of the finished space, you can plan a basement to make it work best for you. Try to envision activities you will carry out in the new space. Incorporate the type of flooring, lighting, and furnishing you will need.

Consider some of the following uses for your finished basement:

Work-From-Home Office

During the recent pandemic, more people gravitated toward spending at least part of their days working from home. This trend has continued, and homebuyers may desire space to work in their new home. A finished basement could provide added privacy and space for work duties. In this case, you’ll need to incorporate this functionality through features such as enhanced lighting, power for digital devices, and a wi-fi connection.

Multi-Generational Living

If you intend to use the basement to provide a living space for your parents or older kids returning from college, consider the cost of plumbing fixtures and possibly a kitchen space with appliances. Rather than designing an open floor plan, you may decide to create separate areas with extra walls for a bedroom and bathroom to accommodate more daily living activities.

Those who own single-family homes in New York City can convert their basement into an in-law apartment for a family member or future renter.

Accommodate the Needs of a Growing Family

As your family grows, you may want to utilize a finished basement to provide a safer, larger place for kids to study, hang out with friends, or simply play with their growing inventory of toys. If you spend time in the basement with them, you might also want to add entertainment options such as a television or a workspace.

Homeowners who grow their families past the size they expected may decide to divide the basement space into additional bedrooms for older children.


Larger, open basement designs can serve as a place to host events like milestone birthday celebrations pr casual get-togethers. The basement can include features like a bar, game table area, or other entertainment-based option to help elevate special events.

In warmer climates, like Miami, where homeowners spend more time outdoors, they may also have amenities like pools, landscaped barbeque areas, or large playsets for children. Homes with an above-ground walk-out basement can incorporate the finished basement into indoor and outdoor parties when connected directly to the backyard or patio.

Business or Rental Space

In addition to increasing the future sales price of your home, finished basements may offer value as a source of extra income. A finished basement can facilitate any number of home-based businesses, such as pet-sitting, licensed daycare, or housework-related equipment and inventory. For this installation, you’ll need to pay careful attention to the local building codes and follow the rules for commercial space or rental properties.

Property owners can also convert the space into a living space to help generate rental income. The income they make from that unit can help offset the cost of the remodel over time.

Design Elements for Finished Basements

There are several steps to finishing a basement, each consisting of various components. Typically, you start the project by adding drywall, a ceiling, and a flooring option. From there, you can add furnishings and other features to your design to enhance the functionality of the space. The following additional design touches can help elevate a space and add to its functionality and appeal when selling.


Basements generally receive less light than other parts of the home, especially when fully submerged underground. Therefore, homeowners must carefully consider how they wish to illuminate this area.

Owners can maximize any natural light entering through sliding glass doors or basement windows. Add recessed lighting into the ceiling, wall sconces, or plenty of lamps to help brighten up the space. Basements typically have lower ceilings than other parts of the home, making it less advantageous for intricate lighting features like chandeliers or pendant lights.


Covering concrete floors with tile, luxury vinyl plank, or laminate flooring can beautify the look of your finished basement, as well as add comfort. Talk to your contractor about the need for a subfloor between the concrete base and your selected material to get the best performance from your flooring.

Which flooring options may not work as well? Natural hardwood can warp in the damper air of a basement. Carpet provides comfort, but if you worry about the potential for water infiltration in your basement, you may want to stick with tile or another impervious material.

If your basement remodel consists of adding or modifying an existing bathroom in the basement, you may consider adding heated floors to this area. Heated floors add a luxurious finish that can appeal to potential renters or buyers.

Heating and Cooling

Below-ground basements typically run cooler than other areas in the home. While this may prove beneficial in the warmer months, it can be difficult to maintain comfortable temperatures in the cooler season. Owners must consider that adding air conditioning or heating into the basement will cost more, but ultimately help those in the room stay more comfortable. Smaller basements can consider adding a radiant heating system to efficiently heat the room.

Air Quality

Concerns about air quality in basements arise from the challenge of providing adequate ventilation below ground. Other safety concerns include mold resulting from dampness or radon. Before finishing your basement, test your basement for air quality issues and make sure they’re remediated before remodeling. Even if everything checks out at the start of your project, continue to monitor your basement airquality. At some point, you may need to consider adding a dehumidifier to remove some of the dampness in your basement and prevent future issues.


In addition to electrical outlets for lighting, you’ll need to measure the energy needs of your basement. Will you need to power a large-screen TV for your home theater or appliances for your kitchen area? Can you power all the office equipment required to work productively from home each day? Adding extra outlets at the onset of the project can eliminate the costly task of cutting into drywall and fishing wires to new outlets down the line.


If you’d like to use the basement as a separate apartment, you’ll need to price the cost of adding a full bathroom and work with a plumber for the installation. Even if you don’t want to add a bathroom when you originally finish the basement, it may pay to talk to your contractor.


An egres is another word for an available entrances and exits. Most townships require basements to have a point of egress where firefighters or other first responders can access the lower level of the home in an emergency. If you do not have a walk-out basement or windows that meet the size requirements for your local building code, ask your contractor about adding a point of egress to meet the requirements.

How Much Does it Cost to Finish a Basement?

As with any large home improvement project, remodeling or finishing your basement starts with measuring the anticipated costs and fitting them into your budget. Decide how much you want to spend and how you will pay for the project before narrowing down flooring or paint choices.

When pricing different basement options, the cost per square foot can vary. You can finish a basement at the lower end of the price range with basic tile and drywall. When adding plumbing, heating, and high-end elements such as a home theater, costs per square foot can rise quickly. HomeAdvisor quotes a price range of between $7 – $23 per square foot to finish a basement, averaging $18,400 for a full remodel.

Before investing in an expensive basement remodel, you can speak with a real estate agent about recent trends in homebuyer requests. Determine if similar homes in your neighborhood sell for more money when they offer a finished basement. If you can narrow down price differences, use the information to calculate a finished basement value per square foot. For example, if a home with a finished basement in your neighborhood sells for $15,000 more than a comparable home, you may calculate the value per square foot as $15. If you pay $20 per square foot to finish your basement, your return on investment would equal 75%.


A well-planned basement remodel can provide you with years of enjoyment and also add to the resale value of your home. Remodeled basements recoup most of their investment when it comes time to sell, and owners can further profit off of their remodel by using the area for a business or source of rental income. Homeowners looking to sell their property in the near future should consider adding a more basic remodel and consulting with various professionals about current trends. Those who plan to live in their home for the foreseeable future can focus on a customized remodel that fits their personal needs. Homeowners should carefully consider the upfront costs associated with a basement remodel and discuss next steps with local contractors and designers.

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