I am a big fan of investment real estate but your single family home while it may increase in value cannot really be classed as an investment per se.
What is important is your use of the home and enjoyment of the space you have. As you have mentioned you have considered moving to get more space. The real estate fees for you to sell your home will likely be more than your basement renovation.
Spending the money to get better more efficient use of the space will save you money and increase your enjoyment of your home. Real Estate Fees, Closing costs and moving stress and expenses will add to more than the cost of the renovation. If you some back upon sale BONUS
Go for it !
i definitely am not considering it as an investment. i am basing this decision on need. but when it comes to "how nice do you want your basement to be", then this is where i want to know "well how much will i really get back" because, this is mainly for the nanny or kids play area. so i want to keep the expense at a min. but the contractor says that the difference b/w basic and a nice one is not much since the major cost is all labor...I agree with Berubeland's post above.
I do not consider primary residence as an "investment".
I know it exhibits investment-like behavior and can be used as such, but leveraging it like that creates the mess that the US is in right now, IMHO.
For the same reason, do not think of your basement finishing as an investment that you need to "recover" or "get a return on".
You will probably get some return out of it, esp. if the potential buyer prefers a finished basement and is willing to pay slightly higher price for it.
Depending on how long you stay in this house, the PV of that slight extra premium may not be worth much - definetely not enough to offset the current expenses for finishing the basement.
If I were a buyer, I personally would not buy a house with a finished basement.