By renovating the basement in your investment property, you may be able to increase its value and could market the upgrades within the property description when it comes time to rent it out or sell it. Renovating a basement can be a long process, so be sure to take the following under consideration. It might just help things go as smoothly as possible.
Is renovating my basement the best move? Considerations for homeowners
Before diving into this project, first determine if renovating your basement will increase your property’s value over the average market value of the other properties within the neighborhood. This step is important because big home-improvement projects can take up lots of time and money, so you want to know the project will have a positive effect on your ROI before moving forward.
A report found that 64% of the value from basement conversion projects was recovered after factoring in the increase in property value from the project. So, as long as you conduct research and plan accordingly, you increase your chances of your basement conversion project increasing the value of your property.
Pros & Cons of renovating a basement
Renovating a basement could increase the property value and make it more marketable to renters and buyers. The property’s livable square footage will also likely increase once the renovations have concluded.
On the other hand, you can expect higher utility bills (like heating & cooling) because of the added space. There’s also a chance you may end up having to pay higher taxes due to the increase in your property’s value. All in all, it comes down to whether you feel like the benefits outweigh the disadvantages.
Plan, plan and plan some more!
Once you’ve decided to move forward with the project, it’s time to plan out the specifics of what you want to accomplish. By addressing the steps below, you’ll gain a helpful level of transparency for the project.
1. What kind of basement do you want?
Is this going to be a play area for children, a movie room, an office or a game room? Figuring this out will help dictate the type of work and features needed. If you’d like a movie room, you’ll want to set space aside for a large TV. Whereas, if you’re turning it into a play area, you’ll need enough open space for kids to play.
2. Set a budget
Once you’ve cemented what you want the area to look like, it’s time to set a rough estimate of what you expect to spend. This budget should include the features that you need and leave room for extras that you’d like. For reference, basement renovations range in cost from $11,049- $29,328 with an average cost of $20,188.
Aside from the obvious costs of walls and flooring, you should factor in additional costs of replacing windows and doors, handling moisture and water concerns, rerouting plumbing, installing electrical or HVAC systems, as well as the cost to demolish and clean up any walls that may be in the way.
3. Speak with contractors
Unless you’re handy with tools and have experience with home renovation, you’ll likely need to employ a contractor. Speak with a few contractors in your area until you find one you feel comfortable with. To get a better sense of their skills and alignment with your expectations, here are some of the questions you may want to ask:
• Have you completed similar basement renovation projects? Do you have pictures?
• How long have you been doing basement renovation projects?
• When are you able to begin?
• How long do you think the project will take?
• How much will the project cost?
• What’s your policy for allowing me to make changes during the project?
• How will you clean up at the end of the day?
Once you’ve decided to move forward with a basement renovation, the information above will help to ensure the project aligns with your expectations and is completed efficiently. By planning carefully and thoroughly, you’ll increase the chances of having a positive renovation experience that increases the value of your property.
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