10 Basement Upgrades With The Best Return On Investment

Finished basements are a great way to add functional living space to your home. Whether it's a playroom for kids, an office space, a workout room, or a place for guests to stay, finishing a basement can add beneficial square footage – and can boost the overall value of your home. While there are many things you can do with these versatile spaces, certain upgrades will yield a greater return on your investment than others. If you're planning to spruce up your basement space, consider making changes that will get you more bang for your buck if you decide to sell your home in the future.

The average cost to finish a basement is approximately $32,000, although the price can range from $15,000 to $75,000, depending on various factors, including the quality of the construction and the intended use of the space. In general, investing in your basement pays off, returning as much as 70% of the cost. If you're looking for ways to maximize the value of your home to appeal to future buyers, certain upgrades are likely to do the trick.

Adding an ensuite bedroom in your basement – whether as an in-law suite or a space for guests – is one of the best ways to boost your home's value. These self-contained spaces are in high demand and can increase your property value by as much as 12%. Depending on your basement layout and local building codes, you may even be able to use the space as an income-generating, short-term rental, which could appeal to buyers and help recoup your investment.

Basements often get a bad rap for being dark and dreary, since they typically don't enjoy the same natural light as above-ground living areas. Installing ample recessed lighting is one of the easiest ways to brighten the space and make it more cheerful and inviting. Beyond aesthetics, recessed lighting offers an excellent return on investment. Adding recessed lighting to basements is one of the most valuable home improvement trends in the U.S.

While it might not be the flashiest upgrade, adding an egress window significantly boosts a home's value. These windows must meet specific requirements that allow for safe exit from a space in the event of an emergency. Though building codes vary based on location, egress windows are typically required in order to have a living space or bedroom in a basement. For this reason, they improve how a basement is valued during an appraisal. On average, egress windows cost around $4,000 to install, but the upgrade can add around $20,000 to a home's value.

Transforming your basement into a home theater is a great way to add both enjoyment and value. Dedicated entertainment spaces tend to appeal to a wide range of buyers and can help set your home apart from the competition. While the actual return on investment will depend on the demand in your market as well as the quality of the setup — whether it's a basic screen with recliners or a state-of-the-art viewing space — home theaters can increase a home's perceived value by 10% and 20%.

Adding a bathroom to your basement is one of the most effective ways to increase your home's functionality and value. It makes the space more livable by adding convenience for everyday use as well as when entertaining guests. While a half bath is a selling point — and a good choice if you're dealing with a limited budget or a tight space — a full bath offers even more appeal by transforming the basement into a truly livable space. The average return on investment for adding a bathroom to a home is more than 87%.

With remote and hybrid work now a common part of everyday life, adding a home office to your basement is a feature that will appeal to a lot of buyers. Home office remodels typically cost between $50 and $200 per square foot, depending on the size, finishes, and features. The spaces that add the most resale value offer privacy, good lighting, reliable access to technology, and storage.

Adding a gym to your basement can be a great way to appeal to buyers, though the amount of value it adds will depend on the buyer. For those with an interest in health and wellness, it could be a significant selling point. The quality of the gym in terms of the flooring, equipment, and whether it's a clearly designated workout space will also impact its overall appeal to certain buyers.

For buyers who love to entertain, a built-in bar or kitchenette can be a great way to set your home apart from the competition. It creates an additional living space for relaxation and entertaining guests. It also adds function and storage to the basement. The return on investment will depend on buyer preferences and the quality of the finishes. A basic dry bar typically costs $5,000 to $7,000, while a higher-end wet bar can run $15,000 or more.

Radon is a natural gas that is often found in basements, especially in older homes. A professional can test for this in your basement, and if it is found, the cost to remediate is typically between $700 and $1,300. Keeping documentation that shows your home has been tested — and, if necessary, mitigated — can give future buyers peace of mind, which may command a higher resale price.

A basement playroom can be a wonderful space for kids to play, get creative, and explore — all while keeping the mess and noise out of the main living areas. For families with young children, this addition can be a major value-add, making a house feel both more functional and family-friendly. Of course, the return on investment for this upgrade, like some others, will depend on the buyer.