An unfinished basement holds infinite potential. Possibilities include rent-free storage for all the stuff you want accessible without crowding your living space -- or space in which to create a bar, a media room, a man cave or an apartment for your mother-in-law. As long as you’re living in a house with an unfinished basement, you can dream of all the things that space could be. But when it comes time to sell the house, you have to wonder if your home would sell more quickly or fetch a better price if you finished the basement.
Finishing your basement will likely increase the value of your property. That being said, the expenses associated with this process may overshadow your potential gains.
Assessing The Potential Payoff
Depending on the size of your basement, the expenditure required to finish or remodel a basement can quickly approach $20,000. Doing the work yourself with basic materials will save you money, but unless you’re a professional carpenter, the work may not be up to the same standard as the rest of your living space. Splurge on your dream basement finish and you’ll have a hard time recouping your costs.
Talk to five real estate agents and you’ll likely get five opinions on whether finishing your basement before you sell will pay off. In areas where square footage commands a premium and people are always looking for more space, a finished basement could be a plus for sellers. In a down market, when home prices are depressed, it's tough to recoup the cost of any improvements, including finishing a basement, though in some markets a finished basement could help you sell more quickly or attract more potential buyers.
Exploring Your Local Market
If you’re in a market where most basements are finished, having an unfinished basement could play to your advantage, at least to buyers who like the idea of having a space they can finish out themselves. However, if most buyers in your area expect a finished basement, you may want to finish yours to appeal to the largest number of potential purchasers. Studying local real estate ads, attending open houses and talking to real estate professionals in your area can give you a picture of what your market is like regarding finished versus unfinished basements.
Assessing Your House
Most houses in your neighborhood probably share similarities. Real estate pros have always preached that to appeal to the most buyers, you don’t want to be too far out of the norm. You don’t want to be the cheapest house on your block, or the most extravagant. Doing your research into what’s for sale and what buyers are looking for will tell you where your house fits in the local market. For example, if most houses have three or four bedrooms and your home has only two, finishing your basement to include another bedroom or two will bring your house in line with others and help you appeal to more buyers.
If your house already has three bedrooms and real estate agents tell you houses with five bedrooms take longer to sell, you’ll know not to bother adding another bedroom. Home offices, playrooms and media rooms are other basement options that may or may not be standard in your neighborhood.
Evaluating Types of Finish
People put their basements to all kinds of uses, from spare bedrooms to private dance studios or deluxe playrooms. Expression of some tastes, however, could scare off potential buyers -- those, for example, who have no desire for a bar decorated in velvet Elvis kitsch or a wood-floored aerobics studio with mirrored walls. If you plan to finish your basement to help your house sell, stick with generic drywall, paint and carpet, and ensure proper wiring, plumbing, heat and lighting. You should also comply with local building codes.
For example, in order to assert that your house includes a finished basement, you might need to include a separate entrance from the outside. Finish a space in a way that enables buyers to envision multiple uses. You’ll give them the potential offered by the unfinished basement, but with less work required on their part to finish it, and that could be a good selling point.