Considering a Basement Renovation? Read This First
Here’s a question I get asked a lot: Will finishing my basement add value to my home?
In a nutshell, yes. In Atlanta, having the extra space of a basement has always been seen as a big positive. But over the last couple of decades, many people bought homes with unfinished basements and unsurprisingly never finished them. Recently while showing real estate in the City of South Fulton, a buyer remarked that the homes with unfinished basements were “houses sitting on glorified storage.”
Interestingly enough, homes with finished basements have become few and far between. This, of course, make the homes with finished basements more desireable. The recession days of 2007 to 2009 made the increase in home values so negligible that owners never bothered to finish the basements. Their original hopes of increasing the property value by finishing the basement were dashed by the potential of losing money in the end.
As prices in the Atlanta real estate market rise year over year, and home inventory remains low, properties with finished basements stand to see a growing separation in price. Builders are even beginning to charge more for the unfinished basement option as they did pre-recession. In 2007, the typical price increase for a unfinished basement was $15,000 to $20,000 on a home worth $200,000 to $300,000. Today that cost has gone up depending on the size and location of the home. The last annual “Cost vs. Value” Report from Remodeling magazine put the average basement remodel at $61,303 with a 70.3% payback, which made it among the smartest redos if you go all out and put the right upgrades into it. Just remember, if you are finishing your basement with the intent to sell your home shortly after, some appraisers evaluate basements differently than above-ground space.
This stands to reason that resale homes with basements will also see a price increase as demand continues to increase. Basements that are finished and don’t require the buyer to do anything will do even better. If you’re thinking of selling, you may want to investigate what it would take to finish your basement so you can make the most off your sale.