Realtors generally agree a finished basement adds value to a property, but what exactly do they mean by “finished?” Does every basement with drywall, ceiling and flooring qualify?
To clear up the uncertainty, I checked in with a group of realtors, lawyers and financial advisors. The consensus? To be considered finished, a basement needs to include the following:
- A permanent staircase leading to the upper floor.
- Covered walls and ceilings with no visible pipes and wires. The wall covering doesn’t have to be drywall, but it should be of a quality comparable to the rest of the house.
- A floor covering other than bare concrete. We didn’t settle the question of whether epoxied concrete qualifies, but the general feeling was it would if it enhanced the basement design.
- A permanent heating/cooling system, preferably connected to the building’s HVAC system. Window-mounted air conditioners and portable space heaters don’t qualify.
- Code-compliant lighting fixtures and electrical outlets. Any plumbing fixtures for basement use must be up to code as well.
Not every basement can be finished. Some are too damp or prone to flooding. It makes sense to finish a basement and add extra living space to the house if it’s reasonably dry, but it won’t be cheap. The average cost ranges from $18,000 and $22,000. And it can run much higher than that, depending on how you do it.
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Factors Affecting the Cost of Finishing a Basement
Every basement is different, as is every homeowner’s vision for it, so it’s hard to set a standard cost. However, you can get a idea of your likely costs by considering these common variables:
- Size of the basement: The bigger the basement, the more expensive the project. Online estimates range from $7 to $23 per square foot.
- Condition of the basement: Before you cover the walls and install flooring, the basement must be thoroughly sealed and waterproofed. This will cost more if the walls and subfloor are in poor condition and habitually damp, and it may involve some outdoor drainage work.
- Existing infrastructure: Some basements already have basic plumbing, electrical and HVAC ducts. Others don’t. The project will cost more if these need to be installed from scratch or require major modifications.
- Project scope: It doesn’t cost as much to create a rec room as it does to fashion a living area with a bathroom and kitchen. Extras like a fireplace or jacuzzi add to the cost.
- Choice of materials: This accounts for 70 percent of the cost. Choosing top-quality materials over utilitarian ones drives up your bill.
- Cost of labor: It’s possible to DIY much of the work, but electrical, plumbing and structural changes that need to be up to code are best done by pros. Contractor rates vary from state to state and tend to be higher in large urban areas.
- Permits: Structural, plumbing and electrical modifications usually require building permits. These can cost be as little as $200 or as much as $2,000, depending on the community.
How Much Does It Cost To Finish a Basement?
You might convert a small unfinished basement into a living room or rec room for as little as $4,000, if it’s easy to tie into the building’s HVAC and electrical systems. But that would be rare. On the other hand, turning a large basement into a dwelling unit could cost upwards of $80,000.
Here are some cost ranges for essential parts of the project:
- Waterproofing: You can seal floors and walls yourself with a paintable sealer. But if need complete outdoor drainage work, expect to pay a landscape or drainage professional between $1,000 and $3,000.
- Electrical work: The cost to hire an electrician to install new light fixtures and outlets could be from $3,000 to $12,000.
- Plumbing: Installation of new plumbing and fixtures costs $2,500 to $15,000.
- HVAC: The average cost to install new ductwork runs $12 to $25 per linear foot. You can reduce that by installing polyester ducts, but they don’t last as long as galvanized steel ones.
- New stairs: If the basement lacks a permanent staircase, it will run $2,000 to $7,000 to build one.
- Windows: The basement must have at least one egress window. If you build bedrooms, each requires its own. Cost per window runs $1,000 to $7,000.
- Walls and ceiling: It will cost between $700 and $1,400 to frame new walls, $1,500 to $4,000 to insulate the walls and ceiling, and $1,000 to $3,000 to hang drywall. Add $1,250 to $3,500 for painting.
- Flooring: Depending on the type and whether need a raised subfloor, expect to pay $2,000 to $12,000.
Benefits of Finishing a Basement
A finished basement becomes part of the living area of the house. Although real estate agents don’t normally include its square footage in listings, it still adds to the home’s value. The average return on investment for a finished basement is around 70 percent.
Here are some other perks:
- Improved air quality: Finishing helps control the mold and moisture endemic to basements and prevents mold from circulating throughout the house.
- Improved storage space: Even if you just use the basement for storage, it will better serve that purpose if it’s wired for lighting and the walls and floor keep out moisture.
- More living space: Large families will enjoy the extra space. If you go all out and create a dwelling unit, you’ll have space for semi-independent teenagers, family elders or possibly even renters.
How Much Can You Save if You DIY?
You can save on labor costs by doing the work yourself. Interior waterproofing, framing, drywalling and painting are all DIY-able. Assuming you don’t make changes that require permits, you might even DIY plumbing and electrical work as well.
If you do hire contractors, you can save on labor costs by performing non-specialized tasks, like pulling wire and installing electrical boxes.
Labor typically accounts for only 20 percent of a basement finishing project, so your efforts won’t take a big bite out of your final bill. But you’ll gain the satisfaction every DIYer feels after a job well done.
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