A finished basement can unlock new possibilities for your home—more living space, a guest suite, or even a cozy movie den. But when it comes to your home's value, is it worth the investment?
Whether you're planning to sell soon or just dreaming of more room to spread out, here's what to consider before calling a contractor.
The short answer: it depends.
A finished basement can absolutely increase your home’s appeal—but it’s not always a dollar-for-dollar return. Buyers tend to value above-ground space more, so while your basement remodel may add function and flair, it might not boost your appraised value quite as much as a main-floor addition would. That said, the enjoyment you get from using the space often makes the investment worthwhile.
Pro Tip: Finish your basement for your own benefit first, then see what value it adds down the road when you're ready to sell.
Not all basements are created equal. The structure of your basement can impact both renovation costs and resale value.
The gold standard. With direct access to outdoor space and natural light, walk-out basements are highly desirable. They’re even prime candidates for rental units or in-law suites.
Halfway between walk-out and traditional basements, these typically offer some natural light and a few full-size windows. Great for rec rooms, home offices, or hobby spaces.
Fully below ground, often with limited light and concrete walls. These can still be transformed beautifully—but may require upgrades like egress windows for safety and compliance.
When appraising your home, square footage is a key factor—but not all square feet are equal.
Above-Grade: Living space above ground (main floors)
Below-Grade: Living space below ground (basement)
Below-grade space is typically valued at about half the price per square foot of above-grade space. So if your area averages $150/sq. ft., expect basement space to be valued closer to $75/sq. ft.
Appraisers also compare homes with similar above-grade square footage. So if your basement adds livability, it may help your home stand out—but it won’t fully replace main-floor space in a buyer’s eyes.
Before you grab a hammer, here’s how to plan for the best return—financial and functional.
Check local building codes and permit requirements before starting. Unpermitted work can result in fines or failed home inspections down the line.
Are you adding a guest suite? A home gym? A media room? Define your goals based on your lifestyle—and, if selling soon, what features appeal to local buyers.
Consider structural constraints like support beams or water heaters early on. Open floor plans are popular, but may require strategic planning around load-bearing walls.
Most areas require at least 7 feet. Lower ceilings can make spaces feel cramped, so talk to a contractor about maximizing vertical space.
Natural light is a big bonus. If that's not possible, recessed lighting can brighten the space without sacrificing headroom.
Avoid hardwood. Instead, opt for luxury vinyl, tile, or high-quality carpet for warmth and durability.
The EPA recommends testing for radon in lower levels. It’s easy, inexpensive, and helps ensure your basement is a healthy place to spend time.
A finished basement can absolutely enhance your home—but the value goes beyond resale. It’s about how you live in your space.
Whether you're preparing your home for market or planning your forever home, smart renovations—done right—can be a rewarding investment.
Thinking about financing a home improvement project?
Our team at BankFirst is here to help you explore your options and make confident financial decisions every step of the way.
We've been helping customers afford the home of their dreams for many years and we love what we do.
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