Many families choose to create extra living space in their homes by finishing the basement. It’s a popular option for those who need more space in their current home. Those building a new home can choose to have the basement finished as part of the build, or even turn it into a legal suite.
The big question, of course, is whether or not a finished basement adds value to the home. The short answer? Yes, it does. Let’s break it down a little further to better explain that answer.
More Bang for Your Buck
Essentially, when you finish the basement, you get more living space within the same building footprint.
If you decided to add a finished basement to your current home, you get the space you need, for less money than if you were to go out and buy a new home that already has the basement finished. You can tailor your new basement plan to fit your needs, budget, and timeline.
In a new home, getting the space you really want by adding a finished basement at the time of building allows you to utilize that space as soon as you move in (rather than living in a construction zone a couple of years down the road). You’re also able to absorb the cost of the basement into your mortgage, which usually makes it more affordable rather than paying a large amount for a renovation.
In both of these cases, the homeowner gets value from the finished basement because of the additional living space with a relatively low cost.
Older Homes vs. New Homes
The value of a finished basement can vary slightly based on the type of home we’re talking about. And no, we’re not talking about the style of the house. This is where age is an important factor.
In an older home, you have to consider all of your costs. Building codes change over time, and many older homes have basements that won’t meet today’s standards. Finishing the basement to current building codes can cost a lot of money, especially if electrical components need to be fixed. It may even be impossible to finish the basement to a look you love. In cases like this, you won’t be able to recoup the money you spend on the remodel.
In a newer home, it’s often worth the money to finish the basement. By including the finished basement in your original home build, you’re able to save money. This is because the cost of the materials and labour is already accounted for in your new home build. And as mentioned, the cost of the finished basement is built into the overall price of the home.
How Are You Finishing Your Basement?
You also have to take the design into your consideration. Almost all families appreciate having extra living space in a home. If you’re finishing the basement into a general-purpose basement – maybe a rec room, a guest bedroom, and an extra bathroom – then it’s likely going to have widespread appeal.
However, a finished basement with a specific purpose can be more or less appealing to certain buyers if/when you sell the home down the line. For instance, some people love the idea of having a separate income suite in the basement to earn a bit of extra money or a suite designed for a multigenerational home. However, other buyers will be turned off by a home with these features because they don’t want to share their home with others.
And a finished basement with something highly specific, like a home movie theatre or an exercise studio with floor-to-ceiling mirrors could be even less appealing to some buyers. If these are the types of things you really want in your home, the value comes from your own enjoyment of the space.
If you’re planning on living in your home for many years to come, you won’t be as concerned with the resale value as someone who is updating the basement to sell their house. But the basement design can affect the resale value of the home – either negatively or positively – so think about what you want and need before making final design decisions.
What Do Others Do?
Something else to consider – at least in terms of resale value – is what the neighbours are doing with their basements. If you’re the only home on your block with a finished basement, generally you can expect your home to be more popular than others in the neighbourhood. Homebuyers who are looking in that neighbourhood may not be expecting a finished basement and it can be an attractive feature.
On the other hand, if most of the homes in your neighbourhood include finished basements, your home is likely to have a lower value than nearby homes if you don’t have one – and it could be harder to sell your house.
How Does a Finished Basement Add Value?
We said at the beginning that the short answer was “yes”. So let’s get into some specifics…
Additional Bedrooms and/or Bathrooms
When finalizing the plan for your basement (whether a renovation or a new build) most people add at least one bedroom and a bathroom. You’ve turned a 2-bedroom, 1-bathroom house into a 3-bedroom, 2-bathroom house!
While technically the square footage of a basement doesn’t ‘count’ towards the total number for the home, having these extra rooms in your basement increases the usable space for a wider variety of potential buyers when it comes time to sell.
And in real estate, more bedrooms and bathrooms are always a big bonus (AKA strong selling points!).
By turning the basement into a suite (separate or shared) you have the opportunity to make some money and help offset the cost of your mortgage. A side benefit of an income property is that banks look at these types of homes more favourably, as rentals are generally always in high demand, at least in the Edmonton market!
Let’s be honest – have you ever walked into a house and said “there’s too much storage space in here!”
We didn’t think so. With a finished space you can add more room for storage – either with lots of shelving or a cold room for food storage – you have options! And when it comes to resale, your property will stand out in comparison to other homes that won’t be able to measure up in the storage department.
For many buyers, a finished basement is one of the best ways to increase living space while sticking to a budget. And it’s going to add at least some value to your home.