Finished Lower Level

Pros and Cons of Finishing a Basement

When building a new construction home, you’ll have to make a decision about leaving the basement unfinished or spending the extra money to have it finished.

Finishing a basement will add more to your overall budget when building a home, but finishing the basement is usually a cheaper cost per square foot than the main floor. There are many other factors that you need to consider depending on where your home is located and what the real estate market is like. As with any decision, there are pros and cons to finishing a basement. This article will explore these points.

Pros of Finishing a Basement

More usable space

The biggest benefit of finishing your basement is that it actually opens up an area of the home which was previously lying unused. The best part is that you don’t have to go and buy additional property or a larger main level. For the fraction of the cost of purchasing a new piece of property, you can increase your living space using the basement space.

You can also influence what you want this new space to be: a mancave, movie theatre room, a playroom, a room for hosting parties, or just about anything that you can imagine. It all depends on how creative you want to get.

Financial gains

Finishing up your basement will also increase the value of your home. If you are planning to sell your property a few years down the line, then finishing the basement can be a strategic investment.

This effect will be even more significant if you happen to live in a neighborhood where most homes have unfinished basements. It immediately makes your property stand out among the competition.

So, even though finishing costs money, you can earn a decent return on that investment if you plan and execute the finishing work properly. Some sources estimate that the return on investment could be as high as 70-75%.

An alternative to zoning law restrictions

Finishing up your basement can give you a useful alternative to expansions that are in conflict with local zoning laws. For example, you may have had a tough time expanding certain sections of your home because they end up being too close to the neighbor’s property. Or, perhaps, you cannot go higher than two floors because you are already at the height limit as per local laws.

Opening up the basement for use by finishing it can give you that additional space without having to worry about zoning laws. You just need to make sure that whatever you use the basement for is in compliance with the local laws.

An additional source of income

If you can make your basement habitable, then you can potentially rent it out or list it as an AirBnB/Couch-surfing accommodation. You can earn a regular income from that space which was lying unused.

You will have to ensure that the basement accommodation conforms to the local fire code and has appropriate entrance and exit provisions. You might even want to plan a parking space outside the basement for better marketability of the basement listing.

Keep it simple

In order to finish your basement, you do not really have to go all out and select the most premium materials/fittings. A simple and functional flooring, heating, and lighting will work in most cases.

You do not really need to build a kitchen, which can be expensive. You can, perhaps, do some of the work yourself and hire experts for complex tasks like plumbing and electricals. In this way, you can keep the costs of finishing the basement to a minimum.

Cons of Finishing Your Basement


Finishing up a basement can cost $25 to $35 per square foot. You can do it for around $10, as explained in this video. If you go for top-end materials and fittings, then that number can easily touch $50 per square foot. So, you have to be prepared to put up some serious money.


Finishing work for a basement can run into several weeks and even months. Sometimes, weather can also play a factor in further lengthening that schedule. You will also have to work with contractors or professionals, who will have their own scheduling issues. In order to work on the basement, you will certainly have to find some time from your busy schedule in order to execute your plans.

The return on investment might not come

Above, in the pros section, we talked about how investing in finishing up the basement can reap rich dividends when you sell the property or rent it out. However, sometimes, that strategy will not play out as expected.

Sometimes, you may end up pricing yourself out of the market if most of your neighborhood is selling properties at rock-bottom prices with unfinished basements. You will have to work on finding a buyer who values a finished basement. The risk of finding the right deal is always there.

Moisture and climate

Depending on the location where your property is located, humidity and moisture can play havoc in your plans for maintaining a newly finished basement. Moisture is present in the basement at almost all locations. It can lead to mildew and mold formation.

So, you will have to spend some money on an on-going basis to ensure that you fight the effects of high humidity which basements are known to have.


We hope that you now have a good idea of both sides of the argument for finishing a basement. If you can balance out the cons or find a way to address them, then the pros can be quite rewarding. If you think that the cons are too much to handle at this moment in time, then perhaps you might want to wait for a more appropriate time to finish your basement.

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