Highlands Ranch resident Andrea Corrales wasn’t thinking about the real estate market when she decided to renovate her home’s basement. Corrales merely wanted more room for her expanding family.
But she admits her new, improved basement does enhance her home’s appeal.
And in today’s flat housing market, that means plenty to homeowners.
Metro-area basement renovators are reporting brisk business. Some of their customers are looking to upgrade their home’s market value, while others figure if they’re going to wait out the housing slump, they might as well do it in style.
Corrales’ basement went from a concrete floor draped with carpet scraps to a polished guest room and recreation area.
“It was really cold and kind of spidery, not a place you’d want to spend a lot of time,” she says of her old basement space.
Nick Haag, president of Accell Construction in Aurora, says adding bathrooms and bedrooms to a home, even if one must descend a narrow stairway to reach them, increases its value.
“That’s what I try to talk to (my clients) about, increasing square footage and adding things people really look at,” Haag says.
Having an extra bedroom or bathroom in the basement will up the total number of each in a home, which makes the home’s MLS listing more attractive, but while a home’s price tag increases with a finished basement, the cost equation doesn’t immediately balance out.
“A customer would have to plan on staying in their home for five or more years to see their value back,” he says.
Occasionally, a well-timed renovation can have an immediate impact, no matter how flat the market may be.
Haag flipped a home recently, updating the basement in the process.
“I know that’s why we sold the house,” he says. “We probably wouldn’t have had any lookers” without the basement renovation.
Linda Cox, director of operations for Basement Builders of Colorado, says her business is booming.
Cox’s customers aren’t looking to get rich. Their remodeling needs are based on comfort, not a need to flip.
“They say, ‘I’m going to be here for 10 to 15 years. I want to make myself a space I can be happy in,” Cox says.
Generally, homeowners who renovate their basement can recoup 80 percent of the project’s cost right away if the house is sold, she says.
But those figures vary greatly, depending on location.
Transform a basement into a subterranean palace in a transitional neighborhood, and the homeowner won’t get nearly as much return on the investment when it’s time to sell.
“Be smart about what you want to do,” Cox says, adding that before upgrading a basement, homeowners should understand what houses in a similar price bracket offer.
But don’t worry if the basement in question needs a lot of attention.
“Money can fix anything,” says Cox, who often works on older homes in the greater Denver area.
Cox’s company commonly builds space for wine cellars, recreation rooms and oversized laundry nooks into her clients’ homes. More recently, customers have been clamoring for basement media rooms.
It’s hard to gauge how much a basement renovation project can cost. Some homes’ basements look like bomb shelters, while others need less polish.
Mike Lichty, owner of the Basement Co. in Highlands Ranch, says a rough average for such a project comes to $40,000.
Lichty says his customers renovate their basements to add square footage to their homes and also to offer their teenage children a safe place to hang with friends.
Those looking to add value to their updated basement often add a bathroom or wet bar, he says.
Kristal Kraft, a broker associate with the Berkshire Group Realtors, says do-it-yourself types should proceed cautiously when renovating a basement.
Homeowners must get a permit before they start such a project, Kraft says.
Counties often have differing building requirements, so even if a Denver transplant knew the rules in his or her old state, they may be different here, especially when it comes to local soil issues.
Kraft says she has had deals fall through because of permit issues.
“Whatever time, trouble and money they save on the front end, they lose on the back end when selling,” she says.
