You’ve probably thought about finishing your basement to boost your home value in Michigan. But wait! It’s not always a good idea to do so. Chances are, you’d end up with big renovation expenses that don’t bring big returns.
Why? Because basements are tricky to value. Appraisers even use a different method when estimating the value of properties that have basements, and considering the type and features of a basement is another complex yet vital point as well.
So, should you finish your basement? And if yes, how should you do so? How much value increase can you expect when you finish your basement before you sell a house?
Understanding the Value of a Basement in a Home
Basements have different value calculations than above-grade space. This because they typically don’t have direct access outdoors and are not considered a main living space. Also, the more underground as basement is, the less it will add to a home’s appraisal value.
For example, let’s say you use comps to estimate the value of your property that is 2,500 square feet, but 500 sf covers the basement. Your house would then be marketed as a 2,000 sf with the basement dimensions included separately. Depending on the condition of the basement and what appraisal guides your realtor or appraiser is using, that extra 500 sf may or may not add additional value.
Different Types of Basements
The first factor to consider about possible additional home value is your type of basement, all of which have different pros and cons.
This is the usual kind you think of when imagining a basement. It has concrete walls and a few small windows, if any at all.
What makes this type low in value is its lack of fresh air and natural sunlight. And depending on the add-ons, it often serves little purpose too. Many homeowners just turn non-walk-out basements into storage areas.
Partial Drop In Basement
The land level comes to about half the height of the wall of the basement with this type. Most partial drop in basements have full-sized windows, but the land grade doesn’t allow for a full-sized door.
This type generally has a higher value than non-walk-out basements because of the natural light that can pass through its windows.
Full Walk-Out Basement
Now, this type comes the closest to feeling like another living space and will generally match the above grade rooms more closely. Walk-out basements have enough space for full-sized windows and doors, and works perfectly as a landscape asset for the yard. Of course, it brings the highest value among the other two basement types.
But type is only the first factor to think about when estimating the value of your basement. There are other points that affect the value of your Michigan basement too.
Factors that can Boost the Value of Your Home Basement
Lighting is a big factor for any area in a house. This applies to the basement as well. A basement with ample lighting has higher value in general, especially if it’s natural light.
But what if the window is facing an external property wall? Natural light cannot easily come in, and this can pull down the value of your basement. Artificial lights might be best when natural light isn’t strong. Upgrade light fixtures and install a fresh LED lightbulb to illuminate the area clearly.
Square Footage and Height
Not only does a larger floor area equal possible higher value, but a top real estate agent or appraiser would also take ceiling height into consideration to ensure your basement is accessible to new homeowners. No one should have a hard time walking within the space because of the low ceiling, and 8ft or higher is the ideal height.
It is also not recommended to dig down the basement floor to increase ceiling height, as this could cause serious drawbacks to your house’s structural integrity and be unreasonably expensive.
Availability of utilities in the basement is another point to consider. Does it have electricity and a water connection? Does your Wi-Fi reach the basement without a problem? Of course, all utilities and pipes must be in good shape.
Condition of the Basement
Speaking of good shape, your entire basement must be in good condition too. It should have no wall cracks, moisture problems, mold, or other issues. If it does, they must be repaired before the home goes on the market to have the highest evaluation price from the get-go.
Talk with your real estate agent and hire a home inspector to assess obvious or hidden problems and repairs.
Giving as much purpose to your basement other than storage or laundry is recommended. If possible, here are some good recommendations:
- Additional Bedroom – A basement can serve as an additional bedroom in a house, or one of the rooms in your basement can be a guest bedroom (especially if it has a window). When selling a property, it can be attractive for some buyers too.
- Play Area – This is perfect for attracting young families. Many parents in Michigan would be excited to find a home that offers dedicated play space for their children.
- Home Entertainment Spot – A basement can accommodate a full home entertainment system without disturbing the rest of the house or its neighbors. You can give such an idea to buyers with couches and appliances rack. You can even rent a real home entertainment system for home staging too.
- Sports/Den Area – This is a great basement feature for men. A sports area is where they can invite friends for some bottles of cold beer while enjoying cards, pool, video games or TV sports.
- Home Gym – Because exercise is a growing necessity, this could cause some buyers to consider the property more seriously.
Of course, these are only a few ideas of what you can do in your basement. Other options include a workshop, study area, wine cellar, mini bar, home office, craft space, etc.
How to Choose a Feature to Apply in Your Basement
When it comes time to sell, revamping your personalized space in the basement to match what is most in demand can help your home sell faster.
- The best person to consult for pumping up your home value in Michigan is your realtor. Talk with them to see which feature suits your basement. Ask vital details such as local basement trends, best selling styles, and estimated costs for each idea.
- Next, know all the items you need. Think of furniture, appliances, and some other add-ons. You may use what you have, consider buying some or find a renting service for home staging items.
- Avoid overdoing things. Overdoing means more expenses, and bigger unneeded expenses mean lesser returns. Note that a neat and clean basement with just a few pieces of furniture would suffice. The trick is, you should help potential buyers imagine their personal preferences and needs when looking at your basement.
Should You Finish Your Basement to Boost Home Value in Michigan?
This is a tough decision to make, but the right real estate agent in Michigan and some wise considerations can help you.
Lastly, remember that a basement should never be compared to an above-grade floor area when valuing. Therefore, be vigilant when your agent or an appraiser estimates the value of your home and your basement. They should never include the basement floor area in your property’s overall square footage.
You only need to remember the factors that affect the value of your basement. Make a checklist, then see if it’s possible to improve your basement without spending big. Remember that basements generally have lesser value, so you don’t want to waste big cash just to get small returns.