If you’re like most homeowners, you’re always looking for ways to add value to your home. Whether it’s for resale purposes or simply your own enjoyment, adding square footage is a great way to do that. But which project is the better investment—finishing your basement or adding an addition? Let’s take a closer look.

Costs

Basements are one of the most cost-effective ways to add square footage to your home. The average cost to finish a basement is between $10,000 and $30,000. I personally have met with contractors in Columbus about finishing our 800 sqft basement and $30,000 was the standard price. You can obviously go cheaper the handier you are. Compare those prices to the average cost of an addition, which is upwards of $100,000, and it’s easy to see why many homeowners choose to finish their basements instead. Not only is it more affordable upfront, but it’s also a quicker and easier project to complete.

Value Added

However, lets think like an appraiser. Square footage above ground, like with an addition, is always more valuable than below ground square footage. When a home is appraised, only the above ground square footage is calculated into the price per square foot formula, so the finished basement would be excluded, even a basement with a walkout. Yes, the basement still adds value to the home, but the square footage is calculated separately on a line titled, “Approximate Total Finished Living Space,” and at a lesser value. 

Does this mean I recommend the addition instead?! Not so fast! Depending on the price point of your home and neighborhood, it may not make sense to put $100,000 or more into your home. You don’t want to overbuild for the neighbordhood, especially if you’re planning to sell in the next few years. 

At the end of the day, you want to love your home, love the renovations, and have a space that works for you. If you’re on a budget and pretty handy, I’d stick with the finished basement. If you have the budget, longer timelines, and need the space above ground for your home to function better- plus, spending $100,000ish won’t price you out of the neighborhood, go for it!  

If you’re unsure whether a home renovation will price you out of your neighborhood- let’s connect and I can provide you with an equity review! You also may be able to use some your current equity in your home (HELOC- Home Equity Line of Credit) to fund the renovation!