Does a Finished Basement Add Value to My Home?

Does a Finished Basement Add Value to My Home?Finishing a basement results in an average return on investment of 70 percent, according to the last annual Cost vs. Value report from Remodeling Magazine, making it an excellent value–particularly when factoring in the personal enjoyment aspect you benefit from while living in the home. Careful planning and wise spending go a long way toward maximizing that investment.

Basement Values Vary Depending Upon Type

The most successful basement finishes start with ceilings that are at least eight feet high and enough windows to provide ample natural lighting. The lot on which the home is built and the type and size of basement the home has also help establish both the project parameters and the estimated value of a potential finish job.


A home built on a steeply-graded lot typically has a walk-out basement–one with doors in the basement that access the outdoors at ground level, extending the usable living space to a patio or deck. Walk-out basements tend to have high enough ceilings to accommodate full-sized windows, providing lots of natural light, feeling less basement-like and more like the main levels of the home. In new construction, walk-out lots are among the most desirable sites and come at a premium cost.


Not quite as light as a walk-out basement or as dark as a below-grade one, a garden-level basement may allow for full-sized windows, but typically not an exterior door. It’s name refers to the fact that a garden-level apartment is considered to be generally situated between a basement and the first floor, so that people standing up inside it would find their heads at or around street level. Garden-level basements are valued for their larger windows, though not quite as desirable as a walk-out.


Though admittedly the least desirable in many aspects, a below-grade basement with its concrete walls and small, high windows can also be transformed into cozy, livable space by utilizing imagination and design ingenuity.

How Finished Basements are Valued & Appraised

Appraisers value the above-ground living space first, and then the space below-ground. Basements are appraised at a value of approximately half that of the above-ground square footage. The percentage of living space below-ground compared to above-ground factors in as well. For example, if most of the square footage is in the basement, the house overall may not appraise as high as a home with more above-ground living area.

Basement or Addition?

Finishing a basement is generally rated as two to three times more cost-efficient than building an addition. Adapting an existing basement space costs less per square foot than building a new space because the bones of the structure are already in place. An addition requires starting from scratch with the foundation, walls, HVAC, plumbing, etc.

Popular Basement Features

Basements are useful for many purposes and activities, and can often accommodate multiple uses.

  • An in-law suite
  • Home theater
  • Sports Bar  / Man Cave
  • Play Room
  • Workout Room or Home Gym
  • Wine Room
  • Guest Bedroom

Have questions about finishing or remodeling your basement? Finished Basements and More has answers. Contact us now to get started. We serve the Denver metro area and northern Colorado.



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Arvada, CO 80003




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