In the 2005 Cost vs. Value
Report, an annual study conducted by Remodeling Magazine in
cooperation with the National Association of Realtors, the national average cost
of a “mid-range” family room addition without a bathroom is just under $137
per square foot. By comparison, the same study pegs the cost of a basement remodel with a bathroom
and wet bar at just under $66 per square foot. If you add the cost of a
bathroom and wet bar to the family
room addition, you have a cost difference of about $100 per square foot between
the basement remodel and the addition. That will buy a lot of features,
fixtures, and finishes. These figures explain why the modern remodeled basement
is often the nicest room in the house.
Equity and Payback
Another aspect of value is equity and payback, or how the project will affect the immediate value of your home and any long-term payback for the project when the house is sold. These questions may be difficult to answer, but they should be considered before tackling any home improvement project. There are a lot of variables that come into play including location, market, quality of the design, materials, and workmanship. Getting the best value and the best payback hinge on finding the right balance for your specific needs and location. According to the Cost vs. Value Report, very few of the most popular home improvement projects yield 100 percent cost recovery, but basement remodeling holds its own with just over 90 percent cost recovery as a national average, an increase from 79 percent in 2003.