Basement remodeling and finishing: cost, tips, and ideas

My parents’ basement has always been a perpetual pit of 2X4s and bent nails, but what if they knew that a finished basement can net a 70% return on investment? Would they have finished it and boosted their home value? Or would they have ended up putting their money into… Well, a pit?

To answer these questions and keep my inheritance intact, the team at Orchard put together this useful guide on basement remodels. Whether you’re thinking of finishing yours before listing your home, buying a house with a basement, or, like my mom and dad, have an unfinished basement in your current home, we answer all your questions.

What is a finished basement?

A finished basement has been renovated or remodeled similar to the ground floor of the home. It typically includes framing and insulation, drywall and flooring, electrical and plumbing, and finishing touches like paint, baseboards, or crown molding.

The primary goal of finishing a basement is to create additional usable living space. This space can add significant value to your home while providing room for a growing family or for entertaining guests.

Advantages of basement remodeling

Finishing your basement comes with some profound advantages, among them are:

• More usable living space: Basements are often underutilized, and remodeling allows you to maximize your home's square footage. By transforming your basement into a functional living area, you can gain additional rooms such as a family room, home office, guest room, entertainment area, or even a rental unit.
• Increase your home value: A basement remodel can also offer a return on investment (ROI) for homeowners. According to the National Association of Realtors, a finished basement can offer an ROI of up to 70%, depending on the scope of the renovation and local real estate market conditions.
• Add customization: Another advantage of basement remodeling is that it allows for customization. Add a home gym, a wine cellar, a home office, or a playroom for your children — you can tailor your remodel to your lifestyle and interests.
• More functionality: A basement remodel is practical since it can provide you with a functional and valuable living space. 

Disadvantages of finishing your basement

While finishing your basement can be a great way to add extra living space and value to your home, there are also potential drawbacks to consider. Here are some some of the potential drawbacks of finishing your basement:

• Increased energy bills: The extra living space in your basement will require additional heating and cooling, which can be expensive. You may need to install additional HVAC systems or ductwork which can contribute to higher monthly expenses.
• Potential for moisture and mold: Basements are often damp and humid, which can create an environment that is conducive to mold growth. If you don't properly address moisture issues before finishing your basement, you may be at risk for mold growth, which can be harmful to your health and difficult to remove.
• Reduced storage space: Finally, finishing your basement can take away storage space. For example, if you currently use your basement for storage, but turn it into a home gym, you’ll need to find an alternative space for your things. This can be inconvenient and may require additional expenses, especially if your house is small.

Factors to consider before remodeling your basement

Remodeling a basement is a big undertaking. Before taking on this project, consider these five key factors:

Cost

One of the most important factors to consider before remodeling your basement is the cost. Basement renovations can be expensive, so it's important to set a realistic budget and stick to it. Be sure to factor in the cost of materials, labor, permits, and any unexpected expenses that may arise. It's also a good idea to have a contingency fund in case of any unforeseen issues.

Building codes and regulations

Before starting a basement remodeling project, it's important to check with your local building codes and regulations. These codes may require specific safety features, such as egress windows, adequate insulation, and proper electrical wiring. Failure to comply with these codes can result in fines and legal trouble, so it's essential to ensure that your renovation is up to code.

Moisture and water issues

Basements are prone to moisture and water issues, which can lead to mold growth, structural damage, and health problems. Before starting a basement renovation, thoroughly inspect the space for any signs of water damage. If moisture or water issues are present, it's important to address these problems before starting any renovations. This may involve installing a sump pump, sealing cracks in the foundation, or adding proper insulation and ventilation.

Structural concerns

Basements often have low ceilings, support columns, and HVAC systems that can impact the overall design and layout of the space. It's important to work with a professional contractor who can assess any structural concerns and provide guidance on the best way to address them.

Related: Should I buy a house with foundation issues?

HVAC and electrical considerations

As an underground space, basements can require additional heating, cooling, and ventilation systems to ensure a comfortable living area. It's important to consider these needs before starting a basement renovation. Additionally, electrical considerations such as wiring, lighting, and outlets should also be taken into account. A professional contractor can help ensure that all electrical work is up to code and meets your specific needs.

How much does it cost to finish a basement?

Finishing a basement can be a great way to add extra living space and value to your home. However, the cost of a basement remodel can vary widely depending on a range of factors, including the size of the space, the complexity of the design, and the materials used. 

The following is a breakdown of some of the expenses you can expect when finishing a basement:

To keep costs low, prioritize the essentials, research materials, get multiple quotes, and set a contingency fund. Finally, consider using recycled materials, shopping sales, opting for simple designs, and hiring a professional contractor. With careful planning and budgeting, you can transform your basement into a comfortable and inviting living space without breaking the bank.

Popular basement remodeling ideas

When undertaking any home improvement project, it’s always important to consider what will offer you the highest return on your investment (ROI). Basement remodels are no exception. Here are some popular remodeling ideas to help you get the best ROI for your finished basement:

• Additional bedroom: Adding an extra bedroom in your basement can be a great way to increase the livable square footage of your home. This is especially valuable if you have a growing family or are planning to sell your home in the future.
• Bathroom addition: Adding a half bath to your basement can be a valuable addition to your home, especially if you only have one or two bathrooms on the upper levels. This can make your home more appealing to potential buyers and increase its overall value.
• Home gym: Home gyms have grown in popularity as more and more people work from home and embrace a flexible schedule. Turning your basement into a home gym can be especially appealing to those who are health-conscious or have a busy schedule. 
• Family room: Adding a family room to your basement can be a valuable addition to your home, especially if you have a growing family or need more space for entertaining guests. A family room can be a versatile space that can be used for a wide range of activities, such as playing games, watching TV, or spending time with family and friends.
• Rental unit: If you have the space and the budget, converting your basement into a rental unit can be a lucrative addition to your home. A rental unit can provide you with a source of income while increasing the overall value of your home.

A basement remodel is worth it to add space and value to your home. However, the costs of building out your basement to accommodate your needs can add up fast. Be strategic before undertaking this home improvement project to ensure you get the best ROI.

FAQs

Still have more questions? Here are more details about finishing your basement.

What is the most expensive part of finishing a basement?

The costliest aspects of finishing a basement typically include plumbing and bathroom installation, HVAC system modifications, structural modifications, and high-end finishes. It's crucial to establish a budget and work closely with contractors to prioritize your needs and allocate funds effectively during the basement finishing process.

Do I need permits to finish my basement?

Permit requirements vary depending on your location and the extent of the renovation. In most cases, permits are required for electrical, plumbing, and structural modifications. It's crucial to consult with your local building department to ensure compliance with all necessary permits and codes.

How long does a basement remodel typically take?

The duration of a basement remodel can vary based on the scope of work and any unforeseen challenges that may arise. On average, a basement remodel can take anywhere from four to twelve weeks to complete, considering the design, construction, and finishing stages.

Can I DIY a basement remodel, or should I hire professionals?

While it's possible to DIY a basement remodel, it's generally recommended to hire professionals, especially for more complex tasks like electrical and plumbing work. Experienced contractors can ensure that the renovation is done correctly, adhering to safety standards and local building codes.

Is finishing a basement worth the money?

The worth of finishing a basement depends on individual circumstances and priorities. However, it's generally considered a worthwhile investment due to the potential increase in home value, added living space, and improved functionality. Consulting with professionals and considering factors such as local market conditions and personal preferences can help determine if it aligns with your financial goals. Learn more about the best ROI home improvements.