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Finished Basements Offer Opportunity

Homeowners seeking to increase their living space often face a predicament. They could buy a bigger house and incur the cost (as well as the inconvenience) of moving, or they could expand the amount of usable square footage in their current home. 

A room addition usually becomes the focus of homeowners who opt against moving, but a finished basement can boost their quality of life for a reduced price. Contractors should recommend this home improvement to their clients, therefore, as a solution for extending living space while still adding value to the house.

Practical investment

A finished basement makes use of square footage already within the original footprint of the home, which strengthens its cost-to-value ratio. Structural building components such as the exterior walls and rooflines remain unchanged, so typically contractors only need to apply an interior finish to the lower level.

“Basement finishes, for consumers, are the least costly per-square-foot project that they’ll ever encounter,” says Tim Shigley, president of Shigley Construction in Wichita, Kansas, and the 2016 chairman of the National Association of Home Builders (NAHB) Remodelers, the remodeling arm of NAHB. “You don’t have to buy siding, roofing or anything like that to do a project.”

Although homeowners who finish their lower level tend to stay put, basement remodels recouped more than 70 percent of their cost at resale last year, edging out both two-story additions (69.3 percent) and family room additions (67.9 percent). But the finished basement must achieve a distinct purpose, says Patrick Condon, president and founder of Finished Basement Company.                     

“If it’s a really basic space that appeals to everybody, you actually get less resale out of that because it’s just a finished basement,” he says. “If you have a well-designed space, you get a higher resale out of it.”

Essential planning

A successful basement design hinges on the collaboration between contractors and their customers. Construction professionals must listen to clients so they can understand what the homeowner wants to accomplish with the space, and they can propose a solution that achieves this goal regardless of the budget.

“To make a basement useful, you have to spend the dollars. It’s a physical decision to go down the stairs to enjoy the room,” Shigley says. “It’s not like going from the kitchen to the living room.”

Most basement remodels incorporate an entertainment area, and many of them include a bedroom or two plus a bathroom, says Bob Peterson, president of Associates in Building + Design, Ltd., in Fort Collins, Colorado. 

As homeowners spend more to finish their lower level, however, they commonly pursue a higher degree of customization and dedicate space to home offices, gyms, bars, wine cellars and even craft rooms. Peterson recently created a large craft area and separated the room with two 4-foot-wide custom barn doors at the client’s request. 

“They wanted the ability to close that off, but they also wanted the ability to open it up to be part of the rest of the living space so that it could be family oriented,” he says.

Individual style

Basement finishes today often match the style found in the rest of the house, but they can also contrast with the upstairs; thus, contractors should encourage homeowners to choose finishes that make them happy and that will ensure they continue to utilize the space long after the novelty wears off.     

“When we finish a basement, we primarily finish a basement to mirror their main levels of living,” says Peterson, who uses the stacked stone on a fireplace upstairs, for example, as the guide for a new fireplace in the basement. “People in northern Colorado want their basement to feel like home.”

Shigley Construction, on the other hand, has completed a number of finished basements that deviated from the style of the main levels, such as a Tuscan theme for a homeowner who loved wine and a sports bar adorned with a client’s favorite college team.

“If you don’t do it for your homeowner, they will not use that basement to the fullest capabilities—they won’t go down there,” Shigley says. “So listen to your clients and listen to what they want, and make sure you deliver the product that they’ll enjoy for a long time.”

Initial insight

Contractors who add finished basements to their business must first comprehend the difference in cost structure compared with other home improvement jobs. Each lower level presents its own complications, and construction professionals need to anticipate expenses accurately so they can stay within the budget and maintain a sufficient profit margin for their company.   

“The biggest mistake I see is that people get into the market and they just charge on a square-foot basis,” Condon says. “They’ll think that they’re making money for a while, and then realize that they’re underpricing themselves.”

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