Cost Vs. Value in Basement Remodeling

Making your basement more attractive can increase your home's sale price.
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Spending $50,000 remodeling your house doesn't mean you've increased the value by that amount. "Remodeling Magazine," which tracks the cost/value relationship of different remodeling projects, has found that all renovations are not alike. The magazine's 2011/2012 survey found, for instance, that remodeling a home office only increases value by 43 percent of the job's cost. Adding an attic bedroom recovers 72.5 percent. Basement remodeling falls in-between.

Cost Vs. Value

The "Remodeling" survey shows the average cost to remodel a basement was $63,378 in the 2011/2012 period. The increase in value post-remodel was $42,338, which recovers 66.8 percent of the cost. The magazine also provides regional averages, figures for specific cities, and a historical chart of costs and values. The chart shows the 21st century's high point for cost versus value was 2005, when the sale of the house recovered 90 percent of the basement-remodeling costs. The price of remodeling has dropped since then, but so have home resale values.


Even if you nail down the cost/value ratio for your area of the country, that doesn't guarantee you'll see the same returns. Small differences -- the size of the remodel, the quality of the finish, the fixtures or amenities you add -- can make a big difference in the value of the finished project. Variations in the cost of materials or the price of labor affect the ratio and so does the rest of the house: If your kitchen and bathrooms are outdated, a basement remodel by itself won't help much.

Subjective Factors

Another reason the gain from basement remodeling is hard to predict is that its value is subjective. If you put $60,000 into creating a basement apartment and a prospective buyer only needs a basement to store things in, he may not feel you've added much value. A buyer who's hoping to rent out the basement might think the upgrade is an incredible asset. What's standard in your neighborhood plays a role too: If every other house has a basement apartment, not having one probably hurts you.


If you're remodeling primarily to boost resale value, do some research first. Talk with remodelers about prices and real-estate agents about what features local buyers want. It may that putting money into your bedroom or your kitchen will be a smarter investment. If a remodeled basement is something you want for yourself, accept up front that future buyers may not value it as much as you do. Do not neglect the unglamorous basic details for something showier: Waterproofing the basement sounds dull, but it's more important to the finished quality than installing a wet bar.

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