It’s about time we standard having a man contribute to this blog, don’t you think? If you don’t already know, my husband Jeremy is a local Realtor, and he often gets asked questions about getting the most bang for your buck when buying or selling real estate. He’s going to start answering questions here on Springs Bargains on a weekly basis, so if you’ve got one for him, feel free to send it over!
We’re thinking about selling our house and are considering finishing our basement. We received a quote for $27,000 to do the job, and I’m wondering if it will add enough value to our house to justify doing it. It would add a bedroom, bathroom, living area, and about 1200 finished square feet to our 3 bedroom, 2 bath, ranch style house.
Do you think we will turn a profit on the money we spend to finish it, or are we just hoping to break even? Or is there a risk that we could even lose the money?
As a rule of thumb, a typical home in Colorado Springs would gain about $13-15 of resale value per square foot when finishing a basement. (I would apply this estimate for homes in the $150-300k range) So in this case, assuming a good quality finish, you could estimate the increased value at about $18,000. In other words, it’s not a good investment in terms of resale if it costs you $27,000.
A couple things might add more value than this standard estimate. For example, if the home only has 2 bedrooms there may be an added benefit of the 3rd bedroom since 2 bedroom homes are typically difficult to sell.
On the other hand, you may get less value from your basement finish if it’s not done to professional standards or if there are no building permits. Finishing a basement on an old home with very low ceilings or the lack of at least a three-quarter bath will likely bring a smaller return as well.
If you’re preparing to sell your home, you may want to take a look at my Top 10 Projects To Do Before Selling Your Home to get an idea of some things you can do that would probably bring a better return than finishing your basement.