Go ahead, Look in the Basement

Dear Pat,
We plan on selling in three years, when my wife has completed medical school. Meanwhile, we're outgrowing our little bungalow. We've considered finishing our basement to get more space, but we heard that a finished basement doesn't really add much to value. Would we be wasting our money?
--Bursting at the Seams

Dear Bursting--

Adding usable space to a too-small house is never a waste of money. While it's true that a below-ground finished room has less appraisal value that its upstairs counterpart, it's also much less expensive to build. In our older neighborhoods, it can often make the difference between a functionally obsolete home and one that meets the needs of today's buyers.

Before you reach for your tools, Bursting, please make sure that your basement stairway has sufficient headroom. A completely finished basement counts for little if a full-size grownup can't access it easily. But even this situation wouldn't preclude a nice semi-finished space, or a good clean open basement for your toddler to ride a tricycle. Let's look at the minimums for any basement space:

1. The basement must be dry--most basements require drain-tiling to be sure (please see my article "A Realtor's Dream" at www.riverrealty.net) Cost: about $3000.

2. Glass block windows with vents give the basement a chance to breathe. Cost: about $200 each.

3. Wire brush and patch the block or limestone walls, and seal with Drylock or other moisture blocking paint. Cost: DIY or around $500 if contracted.

This above conditioning should give you a clean, usable space that is already superior to most of the basements in our area (and likely worth the $4000 cost at sale time). With some added lighting and outlets, a painted floor, a few rugs and room dividers, you can inexpensively create a semi-finished space that may well suit your needs now, and profoundly enhance buyer appeal when you sell.

A completely finished basement space will require much greater effort and expense. And, of course, the return is much higher. You'll need to spend $3000 at a minimum for an egress window (full-size daylight window that allows for escape in the case of fire) and be prepared to pay a contractor, or have the necessary skills for the insulating, framing, electric, plumbing, drywall and trimming required to create a truly finished, livable space. This can easily run past $20,000 for 500 square feet if contracted, and require lots of your time as well. If you choose this route, be careful that your contractor is completely current on the proper method for insulating basement walls: the common method of sealing fiberglass insulation under a plastic vapor barrier is a recipe for future mold problems. Best to apply a foil-faced foam insulation board such as Thermax directly to the foundation wall, before framing, then drywall without a vapor barrier. Remember, no work should be started until you've done items 1, 2, and3 above.

One final caution, Bursting: make sure your basement investment doesn't exceed 20% of your home's current value before the improvement. Call me, or another Realtor you trust, for an evaluation. Good luck!