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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 :D

Go for it !
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.
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...
 

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but the contractor says that the difference b/w basic and a nice one is not much since the major cost is all labor...
From his perspective, yes, but not from yours.
Fixtures, flooring, nice furniture, lighting, etc. will add-up costs for you.
I guess depends on what you consider "major".
You could easily spend $3K (or more) extra on fixtures.
For your basement ($18K), that is more than 15% extra.
 

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$18K for 600 sq. ft. doesn't sound too bad.
We got our basement finished professionally 3 years ago and it's similar dimensions.
Ours came in around $16.5K including fixtures.
Worth mentioning: there were no rough-ins previously. It was as unfinished and bare as it could be :)

One suggestion I have is to ask for price quote with and without fixtures.
Unless the difference is minimal, buy the fixtures yourself and only pay for labour and building materials.
And if the difference is minimal, I'd ask the contractor why :)
I figure you might be able to save a grand or so in fixtures if you shop around.
I also agree. spending 15-18k depending on your construction is not so bad. Having a basement will add up to your asset's value and will add up all clients want to purchase basement included house. The ROI is not so bad at all.
 

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I wouldn't expect to get any money back actually. Best case, maybe 25%, maybe....

Mainly because you don't know your comparables until you sell and there are so many other factors that go into home ownership for prospective buyers.

It's part of the cost of maintaining the home - unfortunately.

(Yes, realize this yyz - I had some inspiration to respond!)
 

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I have also done a renovation on my basement. To determine the additional value it would add to my home I did a little research. What I found is that typically a finished basement will add another $40-60 per square foot. So, a 600 square foot basement would add $30,000 to $40,000 depending on the home's location.
 

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I've done a couple basement improvements in my day, and I would have to agree with some of the responses that a basement renovation will only add about 10% to the value of the home. While adding a extra bedroom with bathroom (2 or 3 piece) can add resale potential, it doesn't necessarily add that much extra value to the home when selling.

A 20 x 30 foot basement area (600 sqft approximately) can be good for a small 10 x15 bedroom (150 sq ft), and a 15 x 20ft living space (300 sq ft) living space area with a 10 x 10 kitchenette/bathrom area (100sq ft), it can be quite an expensive undertaking these days.

Wall insulation, insulated floor, electric baseboard heating , toilet and drain plumbing, the electrical and plumbing modifications will add significant cost along with any permits + reassessments.

The big hurdle is to provide a fire escape egress for the live-in person. Basement windows have to be enlarged in that case and that can add significant costs to the renovation.
 

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I'm not sure where these folks are getting their numbers from....but I create basement apartments for a living. I do this on properties that I OWN and then I have them appraised. Normally I get about 180% return on my investment, and occasionally 200%. So in other words, if I spend 50k, I increase the value of the property buy roughly 100k.
Here's a link to one of my video series that documents the entire process:
 

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Marty what city are you living in. Watched your videos (great by the way). I am in Ottawa. Would like to ask you a few questions about a basement apartment.
 

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Say what you will, but spending $20k,$50k or more on a basement renovation, with the intent that you can recover the money spent, and then some...is wishful thinking in most cases.

While a RE appraser can tell you that the renovation "adds considerable value" to the resale of the property,

it all depends on locale and the area you live in, and whether the basement is separate from the rest of the house and considered INCOME PROPERTY for the new homeowner.
If the new owner can rent out the finished basement (done to code) for $1000 a month to help with mortgage payments, then maybe.

Real estate agents go by the average prices of homes in your area, and if the average is say $300k, and you spend $50K on basement renovations in the hope of recovering your investment and then some...you may be in for a big surprise.

While buyers may appreciate that the basement has an extra bedroom, rec room for the kids and maybe a two piece washroom in the basement, the listed price is compared to other homes in the same area that may (or may not) have a finished basement.

After all with the 20% down requirement now needed to even qualify for a mortage,
the monthly mortgage payment + taxes +utilities and the listed price (that is subject to negotiation) is what will determine whether the house you just spent $20K renovating the basement is worth a second look, if the same style house next to it is listed $20K to $50K cheaper.

Sure, you can go above the RE recommendations to arrive at a listing price, but then you run the risk of not selling it because it's just listed too high for the area.
 

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Say what you will, but spending $20k,$50k or more on a basement renovation, with the intent that you can recover the money spent, and then some...is wishful thinking in most cases.

While a RE appraser can tell you that the renovation "adds considerable value" to the resale of the property,

it all depends on locale and the area you live in, and whether the basement is separate from the rest of the house and considered INCOME PROPERTY for the new homeowner.

This is a better way of putting it. It all depends on what you do to the basement. There are people that spend thousands on work, but do it incorrectly, and don't do it to code, or even pick really ugly finishes that nobody else likes. In these cases, it's not really adding any value. In some cases you might be lowering the value of your house if everything has to be re-done. But if you are creating an income property by making a legal apartment, now THAT is some real value added.
 

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Marty what city are you living in. Watched your videos (great by the way). I am in Ottawa. Would like to ask you a few questions about a basement apartment.
Hi Danny,

Thanks for the comment! I'm in Guelph Ontario. I generally invest in properties in the Guelph/Kitchener/Waterloo areas. If you want, send me an email to ask a more in depth question: [email protected]
 

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All renovations are not equal, the 10% number refers to renovating an already functional space. For example if you replace a perfectly good counter top, with a granite one, you probably aren't going to recover the full cost of the upgrade on a sale.

That said, taking a completely unfinished basement and finishing adds real value to a house. It's tough to say exactly how much, but it's going to be more than 2-3 thousand dollars. That number that someone said about 10% of the total value of the house is probably closer in this case.
 

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Solicitation and spam in a thread last commented on 3 years ago. Where do these characters come from?
 

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Solicitation and spam in a thread last commented on 3 years ago. Where do these characters come from?
Some business hires a marketing firm to increase their visibility on google or whatever. A few subcontractor hops later, the money ends up paying people in a third world country to post spam. I doubt they check the thread dates ;-)
 
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