photo of nicely completed lower level
  1. Location: The impact of a finished basement on a home’s value can vary by location. In some areas, finished basements are expected and highly valued, while in others, they may not have as significant an impact.
  2. Quality of Finishing: A well-finished basement with high-quality materials and craftsmanship is more likely to add value than a poorly done one. Features like proper insulation, good lighting, and well-planned layouts can make a big difference.
  3. Functional Space: How you use the finished basement matters. A basement that adds functional living space, such as an extra bedroom, bathroom, family room, or office, is more likely to increase your home’s value than one used solely for storage.
  4. Compliance with Building Codes: Ensure that any renovations or finishing work in the basement complies with local building codes and permits. Non-compliant work may not add value and could even decrease it if it leads to legal issues.
  5. Market Conditions: Real estate markets can fluctuate, so the impact of a finished basement on home value can be influenced by current market conditions. In a strong seller’s market, buyers may be more willing to pay a premium for a finished basement.
  6. Buyer Preferences: Understanding the preferences of potential buyers in your area is important. Some buyers may place a high value on finished basements, while others may not prioritize them as much.
  7. Cost vs. Value: Consider the cost of finishing the basement compared to the potential increase in your home’s value. It’s essential to strike a balance between the investment you make in the basement and the return you expect to see when selling the home.
  8. Maintenance: A well-finished basement should be properly maintained to retain its value. Neglected or damaged finished basements can have a negative impact on home value.


Ultimately, the decision to finish a basement should be based on your personal needs and preferences as well as your long-term plans for the home. While a finished basement can add value, it’s essential to consider all the factors mentioned above and consult with a local real estate professional to assess the potential impact on your specific property and market.

Other things to consider before even starting the project:

Whether you are an owner looking to invest in your property or a real estate professional working to help a seller, the topic of basement remodeling ususally surfaces. Prior to beginning any project, it is important to understand what you want to get out of the remodel, your budget, and whether you will receive a return on your investment when you decide to sell your home.

Achieving a return on investment can sometimes be difficult.

The following are three key considerations for you to keep in mind:

Wet or Damp Basement
If you are taking a basement from unfinished to finished, you will have to deal with any moisture issues first. Any leaks, condensation, or flooding need to be dealt with before you start remodeling. This can be a large factor in your rate of return because the cost to fix these issues can run into thousands of dollars. If you neglect to deal with these issues first, however, you will pay far more for mold removal, ruined carpets, and musty smells.

Labor costs
If you plan on hiring contractors, keep in mind that labor is typically the largest part of the cost. A rule of thumb is that materials are about one-third of the cost to the owner and labor accounts for the other two-thirds. This means that handy homeowners can save significant money by doing part of the remodeling job by themselves.

Keep in mind that attempting to do a job that you’re not qualified for may end up causing damage or simply look shoddy, which can ultimately mean more expense to pay someone to undo your mistakes. Plumbing and electrical work should always be left to professionals, but installing insulation, hanging drywall, painting and even installing carpet may be within reach.

Do buyers in your area require builder permits as proof of the quality of remodeling?

Often, for a basement room to be considered a bedroom, building codes require that a basement have a window large enough for occupants to safely escape in the event of a fire, and for a firefighter to enter wearing full gear. This is important because adding an exit to your basement’s foundation can be expensive if there isn’t one present already.

Don’t just remodel for resale value.  While nicely finished basements can help sell your home don’t remodel with the expectation of making a profit. 

Remodeling a basement can be fun, but getting the best return on your investment may take some elbow grease. For those homeowners willing to take the time to do the job inexpensively and effectively, however, there can be a significant payoff.