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Old 04-29-2012, 10:54 PM   #1
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to finish basement or not??


I have recently moved into a large house with an unfinished basement. 1000 sq ft, that I will never need for my own use. I am wondering if it is worth it to finish the basement put a suite in. either for rental income or for more value for resale later. I have heard that the City of Coquitlam where I live is very sticky on secondary suites and building codes?? It is completely unfinished. I have been told there is sufficient electrical available to run a kitchen and washer and dryer for the suite, but there are only 2x4 studs around the perimeter, no roughed in plumbing yet. Any suggestions on cost and final value increase to my home.

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Old 04-29-2012, 11:06 PM   #2
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to finish basement or not??


According to Zillow, the return on investment for basement finishing is 75.4% (2009). If you are never going to use the space for yourself, spending the money to finish it for the sake of future sale price increase is actually going to get you a net loss.

If you are going to rent it out as a suite, you're going to have to do your own analysis for how long it will take to break even. Personally, I wouldn't want to turn my home into apartment living.

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Old 04-29-2012, 11:27 PM   #3
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It's always a great idea to have some finished area in a basement.

I remodeled a home once and put in a new basement with a large bathroom with room for a laundry, two huge bedrooms, and a living area. I only wish I would have had an area for a kitchenette. I had an exterior entrance and 3 egress windows.

That is the big thing, an exterior entrance and egress windows.

I have built some duplex type townhomes which share an exterior entrance and have egress windows. There are bathrooms there, or stubbed in.

I have a plan for another project which includes a family room, bedroom, egress window, exterior entry, kitchenette, laundry, bathroom, utility room, all in 750 square feet. I also have a place there where a woodburning stove could sit.

You would have to check your local regs, but I don't think it is a very big deal to have a separate apartment as long as you don't plan on turning it into a separate property (condo or townhome).

As far as value created, and what you can spend, I would ask what you could rent the space for. And consider garage and yard space as well. Could you rent out a one bedroom apt. with laundry, etc. and a one car garage for $600/month? Many would be happy to make a 10% return, so they would spend $72,000 to make $7200/year. Of course you have some taxes and insurance and vacancy, but this should be a rough guide. You can put a lot of finish in 1000 square feet for $20,000.
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Old 04-30-2012, 12:08 AM   #4
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to finish basement or not??


Welcome to the forums! I'll move you to "General Discussion" for more answers than in "Introductions"

Check with local real estate offices, tax assessor and your Building Department for local answers as each area is different.
You are getting some good answers here, almost hate to move you.....

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Old 04-30-2012, 12:47 AM   #5
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One scenario in which it might increase the value of your home beyond the cost of renovation is if it adds a) liveable square footage to your dwelling and b) adds more bedrooms.

Home values are based to a degree on number of bedrooms and number of interior square feet. However, there are factors that may prevent the space, when finished, from being counted in the total square footage of the house. If the stairs down to the basement don't meet code in terms of headroom and other measurements, for example, then you cannot count the area as liveable space, and so the size of your house does not increase and you cannot count any rooms down there as part of the number of bedrooms of the house.

As far as rentals go, you should talk to a real estate agent. They can look at the space and tell you what you could rent if for and then you can make an informed decision as to whether you can get an adequate return on your investment.
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Old 04-30-2012, 08:03 AM   #6
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to finish basement or not??


If you add living space in your basement, you will most likely add cost to your tax assessment. Make sure to figure that into the equation.

also, every basement I have ever seen got wet eventually, regardless of how they were designed. The ones that were not finished caused a lot less heartburn.
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Old 04-30-2012, 08:23 AM   #7
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to finish basement or not??


Quote:
Originally Posted by trudels View Post
I have recently moved into a large house with an unfinished basement. 1000 sq ft, that I will never need for my own use. I am wondering if it is worth it to finish the basement put a suite in. either for rental income or for more value for resale later. I have heard that the City of Coquitlam where I live is very sticky on secondary suites and building codes?? It is completely unfinished. I have been told there is sufficient electrical available to run a kitchen and washer and dryer for the suite, but there are only 2x4 studs around the perimeter, no roughed in plumbing yet. Any suggestions on cost and final value increase to my home.
First of all, are you going to do the work yourself, or hire it done? If you're going to hire it done, I can pretty much assure you that the value of the house will NOT increase as much as the cost of the project.

Turning it into a rental income unit could run you into all kinds of issues - from a different property tax rate, to egress & fire escape issues, to permit difficulties.


I'm thinking that unless you REALLY want a finished basement, it's probably not be worth doing.
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Old 04-30-2012, 09:39 PM   #8
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to finish basement or not??


It is a huge undertaking. Lots of good info in the post already. I'm a single guy living in and renovating a basement at the same time. The main floor is rented out bringing in an income. In my city there are strict regulations. Ceiling height, sprinklers, interlocked hard-wired fire alarms, appropriate egress, fireblocks, etc.

Two extra 3'x3' windows were installed. One at the kichen sink and one in the living room. A shower was added where there was only a powder room previously. If you are there for the long term it may be a benefit, but it's going to rack up your line of credit. Do you want to deal with someone living in your home? You will have to attract and screen potential renters. It will be a part of my retirement income someday. There are benefits.
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Old 04-30-2012, 10:53 PM   #9
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to finish basement or not??


Thanks for all the replies. The basement is full height -and stairway is to code already. It has a direct access door outside already and 2 windows so we would use one for the bedroom. The other for kitchen, and eating area.
Would have to vent the bathroom somehow?? and dryer vent as well. Hopefully neither of these would cause leakage in a very dry problem less basement so far. We've just gone through our 1st Coastal BC winter, rainy season with no water issue. A one bedroom bsmt suite in this area would likely rent for $750 per mo. Is there a $ per sq ft. that could be estimated in finishing this area. We could do some of the finishing work ourselves, flooring, tiles, backsplash, but mostly we would be hiring someone.

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Old 05-01-2012, 10:32 AM   #10
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to finish basement or not??


Trudels,

Sounds like you are in great shape to start. Go for it. Jump in with both feet.
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Old 05-02-2012, 04:50 PM   #11
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thats Great thanks
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Old 05-03-2012, 06:21 PM   #12
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to finish basement or not??


I just finished my basement with a guest suite and a storage room. I had it done by a contractor and the cost will end up being about 31000 USD. I'm in GA, but haven't found it much cheaper to get work done here than in AK and the quality there was much higher. This guy was pretty good, but I'll still have to get a couple minor things fixed. It's nice but not fancy-laminate floating floor, tile bath, but laminate counters.

My furnace/ac was big enough to handle the finished space and it was plumbed, though not exactly as it needed to be.

I'd had the windows replaced already so they met egress requirements.

I doubt if I'll get the money back, but I think it will be more marketable and the space is nice.

As far as tenants/rental income, it can work out well. In the past, we'd owned 3 duplexes and it seemed when we lived in part of it, we had no renter issues. It helped enormously for tax deductions (don't know if it will for you) and we did get income from it. Rules do vary per location though.

Good luck.

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