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Default return on investment of partial basement finishing?

Folks,

I am loooking for advice on modest ways we can improve the function and
value of our basement.

We bought a 60-yr old home last summer with a dark and unattractive
block basement. It is always dry, but only because the previous owner
installed effective french drains and a sump. There is efflorescence
on the walls and the sump is active during rain, so there is water
coming through the walls.

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.

So I am wondering if--like modest kitchen upgrades--a partial basement
upgrade will have a better ROI than a full remodel.

My idea is to do modest upgrades to simply make the basement look
clean, bright and bone dry. My list so far includes:

* Add downspout extensions and re-grade soil to slope away from outside
basement foundation, to reduce outside water flow during rain.

* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

* Replace 5 old Hopper windows and rebuild wells.

* Paint basement floor.

* Electrical: Untangle electrical mess of wires, install good lighting,
multiple electrical sockets

* Add an emergency marine-battery sump pump.

* Maybe add simple baseboard heating.




I would value other thoughts and suggestions.

Thanks.

  #2   Report Post  
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Edwin Pawlowski
 
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Default return on investment of partial basement finishing?


wrote in message

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.


Your list sounds reasonable and on a track to do it "right". Are you
selling your house in six months? Six years? 16 years?

Forge the ROI if you plan to be there for a while and consider the enhanced
use for your family. There is a value to that aside from money.


  #3   Report Post  
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Default return on investment of partial basement finishing?

We may sell within 5 years.

We do want to enhance use for family, but ROI is also important to
us--at least to the extent we can minimize actual loss.

  #4   Report Post  
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Bob
 
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Default return on investment of partial basement finishing?

Realty magazine did a study on this.
http://www.realtor.org/rmomag.NSF/pa...5?OpenDocument

wrote in message
oups.com...
Folks,

I am loooking for advice on modest ways we can improve the function and
value of our basement.

We bought a 60-yr old home last summer with a dark and unattractive
block basement. It is always dry, but only because the previous owner
installed effective french drains and a sump. There is efflorescence
on the walls and the sump is active during rain, so there is water
coming through the walls.

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.

So I am wondering if--like modest kitchen upgrades--a partial basement
upgrade will have a better ROI than a full remodel.

My idea is to do modest upgrades to simply make the basement look
clean, bright and bone dry. My list so far includes:

* Add downspout extensions and re-grade soil to slope away from outside
basement foundation, to reduce outside water flow during rain.

* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

* Replace 5 old Hopper windows and rebuild wells.

* Paint basement floor.

* Electrical: Untangle electrical mess of wires, install good lighting,
multiple electrical sockets

* Add an emergency marine-battery sump pump.

* Maybe add simple baseboard heating.




I would value other thoughts and suggestions.

Thanks.



  #5   Report Post  
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Colbyt
 
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Default return on investment of partial basement finishing?


wrote in message
oups.com...
Folks,

I am loooking for advice on modest ways we can improve the function and
value of our basement.

We bought a 60-yr old home last summer with a dark and unattractive
block basement. It is always dry, but only because the previous owner
installed effective french drains and a sump. There is efflorescence
on the walls and the sump is active during rain, so there is water
coming through the walls.

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.

So I am wondering if--like modest kitchen upgrades--a partial basement
upgrade will have a better ROI than a full remodel.

My idea is to do modest upgrades to simply make the basement look
clean, bright and bone dry. My list so far includes:

* Add downspout extensions and re-grade soil to slope away from outside
basement foundation, to reduce outside water flow during rain.

* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

* Replace 5 old Hopper windows and rebuild wells.

* Paint basement floor.

* Electrical: Untangle electrical mess of wires, install good lighting,
multiple electrical sockets

* Add an emergency marine-battery sump pump.

* Maybe add simple baseboard heating.



Painting the floor might be a negative if the next folks want ceramic tile.

I am under the impression that the paint interferes with thinset adhesion.

Maybe someone else can confirm or deny that.

Colbyt




  #6   Report Post  
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Default return on investment of partial basement finishing?

* Add downspout extensions and re-grade soil to slope away from outside

basement foundation, to reduce outside water flow during rain.

This is important to have done correctly regardless of what you intend
to do with the basement.
I would put this at the top of the list.


* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

This I would say depends on what condition they are in now. If they
really look like crap and
need it, then it can make it look nicer and make it more marketable for
low cost.


* Replace 5 old Hopper windows and rebuild wells.
This depends on what condition they are in. If they are shot, then
replace them. If just a coat
of paint works, then consider doing that.



* Paint basement floor.

I think this is a good idea. It makes it more attractive and keeps
dust down. You can do it for minimal cost.
Just make sure to do it right, with proper prep work.


* Electrical: Untangle electrical mess of wires, install good lighting,

multiple electrical sockets

Hard to tell what exactly the mess of wires entails. If it's stuff a
home inspector is going to flag and/or a safety issue and you can do
then I would probably do it. As far as lighting/outlets, that depends
on what you're gonna do with the space. Unless you need this for
what you intend to use it for, I would only make sure it has adequate
lighting. I wouldn;t go overboard, nor would I worry about outlets. A
buyer is unlikely to even notice how many outlets there are.


* Add an emergency marine-battery sump pump.

Good idea to avoid a disaster. I'd also consider the pumps that run
off city water. That way you'd have
backup indefinitely, as opposed to only a battery's worth.


* Maybe add simple baseboard heating.

I'd only do that if it's needed for what you intend to use the space
for.

  #7   Report Post  
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Wes Stewart
 
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Default return on investment of partial basement finishing?

On Thu, 02 Feb 2006 20:59:57 GMT, "Colbyt"
wrote:


wrote in message
roups.com...
Folks,

I am loooking for advice on modest ways we can improve the function and
value of our basement.

We bought a 60-yr old home last summer with a dark and unattractive
block basement. It is always dry, but only because the previous owner
installed effective french drains and a sump. There is efflorescence
on the walls and the sump is active during rain, so there is water
coming through the walls.

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.

So I am wondering if--like modest kitchen upgrades--a partial basement
upgrade will have a better ROI than a full remodel.

My idea is to do modest upgrades to simply make the basement look
clean, bright and bone dry. My list so far includes:

* Add downspout extensions and re-grade soil to slope away from outside
basement foundation, to reduce outside water flow during rain.

* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

* Replace 5 old Hopper windows and rebuild wells.

* Paint basement floor.

* Electrical: Untangle electrical mess of wires, install good lighting,
multiple electrical sockets

* Add an emergency marine-battery sump pump.

* Maybe add simple baseboard heating.



Painting the floor might be a negative if the next folks want ceramic tile.

I am under the impression that the paint interferes with thinset adhesion.

Maybe someone else can confirm or deny that.


What difference does it make? Why on Earth should a homeowner worry
about what a next owner might want?

Houses are to live in. Cars are to drive. People who think of them
as "investments" are deluding themselves just like governments that
claim they are "investing in the future."

If you want to put money in investments buy stocks or bonds. If you
insist in owning real estate buy REITs.

  #9   Report Post  
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Default return on investment of partial basement finishing?

7. Wes Stewart Feb 2, 4:20 pm

"What difference does it make? Why on Earth should a homeowner worry
about what a next owner might want? "

Maybe because he's thinking of making several types of improvements,
all of which he could use and enjoy,
but he wants to factor in which have the most impact on resale price.
Sounds very reasonable and smart to me,
as long as one doesn't let this be the overiding issue.

"Houses are to live in. Cars are to drive. People who think of them
as "investments" are deluding themselves just like governments that
claim they are "investing in the future.

If you want to put money in investments buy stocks or bonds. If you
insist in owning real estate buy REITs. "

Maybe he already has investments in stocks and bonds. And which has
performed the best
over the last 5 years? Stocks, bonds, reits or single family homes,
investment genius?

  #10   Report Post  
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Default return on investment of partial basement finishing?

I am under no illusion that this is an investment, in the sense that I
would actually make more money than I put in.

But some remodels are smarter than others; refacing kitchen cabinets,
painting and replacing faucets and hardware can spruce up a kitchen and
give higher return than a complete remodel.

Im just trying to follow the same philosophy for our basement.



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Colbyt
 
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Default return on investment of partial basement finishing?


"Wes Stewart" wrote in message
...
On Thu, 02 Feb 2006 20:59:57 GMT, "Colbyt"

What difference does it make? Why on Earth should a homeowner worry
about what a next owner might want?

Houses are to live in. Cars are to drive. People who think of them
as "investments" are deluding themselves just like governments that
claim they are "investing in the future."

If you want to put money in investments buy stocks or bonds. If you
insist in owning real estate buy REITs.


The overall question was adding value at minimal expense.

A large part of that very much depends on what the next owner wants. I have
never lost money on any of the houses I have owned nor do I expect to when I
sell the ones I own.

I do agree that REITS are a better choice for most people.

Colbyt


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Edwin Pawlowski
 
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Default return on investment of partial basement finishing?


wrote in message
oups.com...
We may sell within 5 years.

We do want to enhance use for family, but ROI is also important to
us--at least to the extent we can minimize actual loss.


You said you wanted to improve function, but now you say you don't want to
improve it for your use. If that is the case, just clean it up, paint
anything that can be painted with a light color and be done with it. There
will be little ROI on a half assed job that the next owner is not interested
in. Invest that money elsewhere.


  #13   Report Post  
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Joseph Meehan
 
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Default return on investment of partial basement finishing?

Wes Stewart wrote:
On Thu, 02 Feb 2006 20:59:57 GMT, "Colbyt"
wrote:

...

What difference does it make? Why on Earth should a homeowner worry
about what a next owner might want?

Houses are to live in. Cars are to drive. People who think of them
as "investments" are deluding themselves just like governments that
claim they are "investing in the future."

If you want to put money in investments buy stocks or bonds. If you
insist in owning real estate buy REITs.


I think it is rather clear that the revheck knows that. He seems to
have a level head on his shoulders.


--
Joseph Meehan

Dia duit


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MCG
 
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Default return on investment of partial basement finishing?

Too much work for negligible return.
Sell the place as is and get a place that suits your needs better than this
one does.
Phil

wrote in message
oups.com...
Folks,

I am loooking for advice on modest ways we can improve the function and
value of our basement.

We bought a 60-yr old home last summer with a dark and unattractive
block basement. It is always dry, but only because the previous owner
installed effective french drains and a sump. There is efflorescence
on the walls and the sump is active during rain, so there is water
coming through the walls.

We would like to improve the basement for our own use and for future
resale value. My understanding is that a full basement remodel
typically returns less than 50% of cost. I don't expect 100% return,
but I don't want to spend piles of money that we can't posibly get
back at resale.

So I am wondering if--like modest kitchen upgrades--a partial basement
upgrade will have a better ROI than a full remodel.

My idea is to do modest upgrades to simply make the basement look
clean, bright and bone dry. My list so far includes:

* Add downspout extensions and re-grade soil to slope away from outside
basement foundation, to reduce outside water flow during rain.

* Clean basement walls, repair cracks, seal and repaint with waterpoof
masonry paint.

* Replace 5 old Hopper windows and rebuild wells.

* Paint basement floor.

* Electrical: Untangle electrical mess of wires, install good lighting,
multiple electrical sockets

* Add an emergency marine-battery sump pump.

* Maybe add simple baseboard heating.




I would value other thoughts and suggestions.

Thanks.





  #15   Report Post  
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Wes Stewart
 
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Default return on investment of partial basement finishing?

On 2 Feb 2006 13:31:53 -0800, wrote:

7. Wes Stewart Feb 2, 4:20 pm

"What difference does it make? Why on Earth should a homeowner worry
about what a next owner might want? "

Maybe because he's thinking of making several types of improvements,
all of which he could use and enjoy,
but he wants to factor in which have the most impact on resale price.
Sounds very reasonable and smart to me,
as long as one doesn't let this be the overiding issue.

"Houses are to live in. Cars are to drive. People who think of them
as "investments" are deluding themselves just like governments that
claim they are "investing in the future.

If you want to put money in investments buy stocks or bonds. If you
insist in owning real estate buy REITs. "

Maybe he already has investments in stocks and bonds. And which has
performed the best
over the last 5 years? Stocks, bonds, reits or single family homes,
investment genius?


Well now lemme see... I bought Simon Property Group (SPG) on 11/14/01
at $28.68 a share. I had a stop loss order in place and sold at
$51.10 on 4/12/04. A slightly bad move but I worry about preservation
of capital. When it was clear that I had found the bottom, I bought
it back on 4/16/04 for $51.32. It closed today at $82.95.

GGP has performed (no surprise) the same and had I not pulled cash out
of it to sink into this house I would be money ahead. But I put the
money in the house knowing full well that I will not recover my
expenditure, but I will add to my quality of life.

Capital Automotive was a great winner, so good that someone bought the
whole thing and took it private. My annualized return over a slightly
less than five year period was 23.46%. (All dividends reinvested)

All of the above are REITs BTW.

Now I don't know how my house has appreciated in the same time period,
but it doesn't match that but what does it matter? I have to live
someplace and if I sold it, I'd have to replace it with something else
equally inflated. And while I don't have a mortgage, the monthly
payment never ends. I'm still buying insurance, paying for
maintenance and my county assessor is delighted to raise my "rent"
based on my new found "windfall." If anyone thinks that they really
own their homes, they should see what happens if they don't pay their
property taxes.

Certainly if someone sells a house in San Francisco and moves to
Fargo, they might realize a big gain, but who wants to live in Fargo?

I stand by my assessment.




  #16   Report Post  
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Default return on investment of partial basement finishing?

"Well now lemme see... I bought Simon Property Group (SPG) on 11/14/01
at $28.68 a share. I had a stop loss order in place and sold at
$51.10 on 4/12/04. A slightly bad move but I worry about preservation
of capital. When it was clear that I had found the bottom, I bought
it back on 4/16/04 for $51.32. It closed today at $82.95. "

And what does any of that have to do with considering which of several
home improvements
one is considering would add the most value to a home? BTW, the
statement
"when it was clear that I had found the bottom...", is a dead give away
as to your expertise
in investment matters. Anyone but a rank amateur knows that it's
never clear that a stock
has hit bottom, which is only clear from hindsight. Plenty of
investors in Enron and Worldcom
thought those stocks had bottomed at dozens of points, all the way to
zero. And getting stopped
out at one price, only to buy it back later at a higher price doesn't
look to smart either, does it?


"Now I don't know how my house has appreciated in the same time period,

but it doesn't match that but what does it matter? "

Then you must be pretty ignorant of what is going on around you. I
have a pretty good idea of what
homes are selling for in my area. Just because you happen to like to
live in blissful ignorance doesn't
mean we all should.

  #17   Report Post  
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Wes Stewart
 
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Default return on investment of partial basement finishing?

On 3 Feb 2006 00:28:47 -0800, wrote:

"Well now lemme see... I bought Simon Property Group (SPG) on 11/14/01
at $28.68 a share. I had a stop loss order in place and sold at
$51.10 on 4/12/04. A slightly bad move but I worry about preservation
of capital. When it was clear that I had found the bottom, I bought
it back on 4/16/04 for $51.32. It closed today at $82.95. "

And what does any of that have to do with considering which of several
home improvements
one is considering would add the most value to a home?


My response was more to a subsequent poster's comments than to the OP,
so I think it's applicable. It's called "topic drift." The question
was asked about what I thought was a better investment, stocks, bonds,
REITs (really a stock) or single-family houses (by this I mean a
primary residence). I offered an assessment.

BTW, the
statement
"when it was clear that I had found the bottom...", is a dead give away
as to your expertise
in investment matters. Anyone but a rank amateur knows that it's
never clear that a stock
has hit bottom, which is only clear from hindsight. Plenty of
investors in Enron and Worldcom
thought those stocks had bottomed at dozens of points, all the way to
zero. And getting stopped
out at one price, only to buy it back later at a higher price doesn't
look to smart either, does it?


It makes sense if you travel a lot and can't have the latest prices at
your fingertips. Most of my stuff is in index funds, but a (fairly
small) fraction is "play money" that is more activily traded, if you
want to call reinvesting dividends "active" trading.

Of course my observation was from hindsight, I never said otherwise.
I was on the road but stopped out at a nice profit, so what's the
problem with that? When I got home and it looked like "irrational
panic" was the driver for the price fall and that had subsided and the
fundamentals still looked good, I bought it back at a few cents more
than I sold if for. Big deal. It's appreciated nicely since then and
had I never owned it in the first place you wouldn't have a thing to
complain about.


"Now I don't know how my house has appreciated in the same time period,

but it doesn't match that but what does it matter? "

Then you must be pretty ignorant of what is going on around you. I
have a pretty good idea of what
homes are selling for in my area. Just because you happen to like to
live in blissful ignorance doesn't
mean we all should.


No, I like living in a custom home in a semi-rural area where there
aren't daily sales of cookie-cutter houses with paper-thin walls next
door to use for "comps" and I'm not about to get appraisals made on a
yearly basis to determine my "profit." The tax assessor and my
insurance agent seem to do that for me.

I need shelter. I don't want to live anywhere else. If I sold this
house only to buy another equally inflated one in the same area, the
only "profit" from the deal would go to real estate agents, title
companies and the rest of the leaches in that business. Frankly, I
wish the prices would fall, taking my tax and insurance bills with
them.

And if I had a basement (I don't) and wanted to paint the floor
purple, I'd paint the floor purple and not worry that the next guy
might want to put tile down.

I'm only suggesting that (IMHO) thinking of your primary residence as
an "investment" is flawed. If you think of it as an ever-inflating
investment, do this experiment: stop putting money into it. Do no
further maintenance, do not upgrade appliances, don't paint, don't
replace carpet, don't water the plants, etc. See how much growth you
get when you quit sinking new capital into it.

I'm all in favor of home ownership and making improvements that
improve quality of life. I simply disagree with the idea that
decisions of this sort should rely so heavily on ROI criteria.

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