Whether you are considering selling right now or within the next five to ten years, the decision to finish your basement is a huge one with lots of factors to consider. Two of the main factors to consider are the cost and return on investment (ROI). When looking into homes to buy or sell, each penny you invest into your property should yield some form of ROI in either the present or the future.
Before we get into the benefits of having a finished basement, let’s break down some definitions. If you are one of our Michigan homeowners, more than likely you have what is considered an unfinished basement. This is a space carved out under your home with concrete slab flooring, minimal lighting, and either no walls or heavily dilapidated walls. These spaces were originally intended for temporary storage, but as time progressed so did people’s needs. Also, over time these options for storage were not as convenient due to the conditions of the basements.
A finished basement is a significant upgrade from this. It includes walls and appropriate flooring. The space is usually wired for electricity and plumbed depending on what the space is being used for. The walls are insulated and designed to look more similar to the rest of the home. The floors are not just a concrete slab but legitimate flooring. The dark, humid space is now gone. It is now replaced with a livable space.
When looking at your ROI for your soon-to-be finished basement, you have to remember that most of the value of your home is going to be assessed by all of your space above ground. These are considered your above-grade (above ground) living spaces. This includes your living room, kitchen, bathrooms, and bedrooms. When it comes to your finished basement, you are going to receive an ROI, but it won’t be quite the same.
Your immediate ROI will be about 70% of your investment. However, that is purely the immediate monetary ROI of your investment if you are trying to sell your home. The way you make adjustments for the remaining 30% will come over time after finishing your basement.
As stated, finishing your basement has some immediate ROI when it comes to adding value to your home. In comparison to the renovation of a room in your home above ground, it is about 70% of that. The remaining return on your investment lies within the day-to-day benefits of having a finished basement.
Investing in finishing your basement can be costly, but as stated before there is a return on that investment so depending on your goals, it could very well be worth it. If you are looking to sell your property, the energy efficient and health conscious results are already a huge selling point for your property if you finish your basement. However, if you are looking to maximize your ROI, here are some tips to help with that.
In conclusion, while the immediate return on investment may not be the most lucrative, there are numerous benefits to finishing your basement that will not only add value to a potential buyer but will also add value to you as the homeowner. Finishing your basement is one of the best decisions you could make as a homeowner regardless of if or when you are intending to sell. Contact Basements Plus TODAY to speak with one of our consultants on how to start the process!
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