As a homeowner, you want to be able to fully enjoy every square inch of your home. Your basement is a special space in your home that you can reinvent into just about anything. It can be the designated hangout spot for the family, a home gym, an apartment or a home office. The beauty of basements is that there is so much creative freedom. You have free reign when it comes to design options and you can incorporate your personal style. So, however you choose to use your basement, what remains true is that finishing your basement has enormous benefits including adding significant value to your home and lifestyle.
While your basement space cannot technically be added to your home’s square footage, finishing your basement is the way to go.
What the Data Says About Finished Basements ROI

A common question many people ask is how much value does a finished basement add? According to research, the ROI on a finished basement is definitely worthwhile. For every $1,000 that you invest into finishing your basement, you will receive about $700 back. So, essentially, embarking on a basement renovation project will have an ROI of about 70%, according to Remodelling Magazine. That is an incredible finished basement value!
This kind of ROI can be expected if your basement renovation includes exterior wall insulation, a paint job on the walls, ceiling and trim, and new flooring is installed. The high ROI proves that one of the most valuable areas to renovate in your home is your basement.
What factors will affect ROI?
While the average ROI for basement renovation is about 70%, there are some factors that will determine whether you may see a higher or lower ROI.

1. Real estate market
The area you live in has a large impact on how much your home is worth, and consequently, the value your finished basement will have long-term. If you are in an area where the market is competitive and there are many homeowners with finished basements, this will work to your advantage and increase the ROI of your basement.

2. Your materials
The quality of the materials you use will impact the value of the basement. If you select luxury finishes, you will spend a whole lot more but you may actually see a lower ROI on your finished basement. The key is to aim for mid-range materials that are good quality but economical as well.

3. Potential
There are various ways you can utilize the space in your basement, but some uses offer a higher ROI. Generally, basements that have more open space tend to be preferred by many homeowners and have a greater ROI than closed-off rooms. So you may want to keep this in mind as you plan.
The more natural light that comes into your basement, the better. Brighter basements are in higher demand, so finding ways to incorporate more natural light will pay off.
How to boost the ROI of your finished basement
There are a number of things you can do to increase the ROI of your basement.
- Waterproofing – We cannot overemphasize the importance of waterproofing your basement before you begin to design the room. This is one of the greatest ways you can protect your property from water damage due to flooding or a leak. Take the time to properly waterproof your basement. It may seem like a small detail, but it goes a long way in ensuring your basement is protected. Since basements are underground, they are prone to moisture, which creates the perfect environment for mildew and mould to grow. So before you plan to do anything else with your basement, waterproof it.
- New Floors – Once you’ve taken care of the waterproofing, the next thing you want to focus on is new flooring. The flooring you choose for your basement should be something that’s well thought out. Not all kinds of flooring are great options for basements because of the possibility of increased moisture. You may have hardwood floors installed in the rest of your home, however, this is a terrible choice for your basement because wood absorbs moisture and this can ruin the floor. The good news is that there are many options to choose from that are more suitable for a basement. Go for choices that are durable and hold up well in moist spaces. Once you have those two things considered, you’ll be able to find the best choice based on what the intended use for your basement is.
- Basement Bathroom – Regardless of how you intend to use your basement space, adding a bathroom is always a good idea. Whether you choose to use your basement as a home gym or a family room, having an additional bathroom makes things more convenient for you and will contribute to the value of your home. The number of bathrooms a home has the better. The idea of installing a bathroom in a basement may be of particular concern if space is limited. Keep in mind that you do not have to install a full bathroom in your basement. Consider adding a half bath instead if space does not permit a full bathroom. However, if you do have adequate room, a three-piece bathroom with a shower will significantly increase your ROI.
- Basement Kitchen – When it comes to installing a kitchen into your basement, any size will make a difference. Similar to bathrooms, kitchens are great additions to a home for convenience and will bump up its value. Before you begin any work installing a new kitchen, get in touch with your municipality to be sure that you are allowed to install an additional kitchen in your home. Building restrictions may prevent you from adding a full kitchen but you can still consider installing a kitchenette in your basement. A kitchenette may cost you between $2,000 and $12,000. A full kitchen will cost more and the necessary permits will need to be acquired. One of the advantages of having a designer on board is that they can help make the most of the room. At the end of the day, the goal is to make your basement as usable and valuable as possible.
- Deal with Radon Upfront – Testing for radon is something that you should do before you begin any construction work on your basement. Radon is toxic and can heightened a person’s risk for lung cancer. You want to make sure that you get rid of it completely from your basement if there is any.
- Install Recessed Lighting – Basements are notoriously dark spaces. You will need to find ways to increase light in the space so it doesn’t feel like a dungeon, unless, of course, that is the intention. For example, if you intend to use your basement as a movie theater, you may want less light. Generally, having more light in your basement makes the space more desirable. By installing recessed lights throughout the basement, you can make the room brighter. Incorporate recessed lighting in as many spots as you can – under cabinets and in the ceiling.
- Create a Mini In-Law Suite – With many families opting to reside in a multi-generational home, creating a suite for some family members that allows them to have privacy while still living in the home is a huge asset. A suite with a bedroom, bathroom and kitchen is all you need to make the space self-contained. The key is to leave the space as open as possible so it doesn’t feel too closed off. Even if you do not use the suite regularly, the space can be used anytime you have out-of-town guests who would like to maintain some privacy during their visit with you.
Different kinds of return on your investment
It’s impossible to know beforehand what the ROI of your finished basement will be, but what you can count on is that it is an investment that will be worthwhile because it will create additional monetary value. There are a number of ways you can reap the benefits of finishing your basement:
1. ROI When You Sell Your Home

If your property features a basement, it will attract more interest from potential buyers.
While it’s important to think about your family‘s needs when you begin planning to finish your basement, you should also consider the future. Should you choose to sell your home, you want your basement renovations to count and be a factor that attracts buyers and makes your home more marketable. You can set a higher asking price with a finished basement then you can with an unfinished one. Not only can you expect your home to sell for more because it has a finished basement, but it will also sell faster.
2. Finished Basement ROI While You Live in Your Home

It’s not just about future homeowners. When homeowners decide to renovate their basement, they want to enjoy the benefit of the investment themselves. A lot of thought should go into how the space can be used to enrich the lives of your family while you live in the home. Feel free to incorporate your unique taste and make choices that will accommodate your family’s needs. This is an ROI that may not have a monetary value to it, but it definitely adds value to the lifestyle of your family. As soon as the basement is complete, families can enjoy the use of their basement space. The sooner renovations can take place the more time the family can have to utilize their basement space.
3. Renting You’re Finished Basement

This is an excellent way to increase your household income. Finished basements are in high demand and many people are willing to pay top dollar for a beautiful basement to rent. Having the ability to generate additional income from your basement is another reason to invest in renovating your basement.

However you choose to use your basement, you can never go wrong when you have a finished basement. As basement experts, we’re happy to help you explore the possibilities for your basement space and ensure you get the highest ROI possible.