Financial experts in the United States have been discussing the potential of an impending recession for several months now, but that doesn’t make the possibility any less intimidating for the average American. Luckily, there are plenty of ways you can prepare for a recession and one of them is remodeling your basement into an apartment.
In this series, we’ve discussed why a recession may create an increased demand for rentals and how your basement remodel can provide an affordable place to live for those in need. But what does the cost of such a project actually look like and will you profit from it in the end? Let’s explore the costs of finishing your basement and what it will take to pay it off.
Part 3: The Cost Breakdown of a Basement Renovation and Paying it off With Tenants
Each basement remodeling project is going to cost a different amount, depending on the size of the space and a variety of other factors. On average, the cost to finish a basement is $55 to $65 per square foot. This means that a 500-square-foot basement will cost about $30,000 to refinish and a basement of 1,200 square feet would cost about $70,000.
A basement with an open floor plan will be the most cost-effective way to remodel it into an apartment. The more walls you put up, the more you have to pay for drywall and framing. If you keep the space between the kitchen and basement family room open and simply section off rooms for a bedroom and a bathroom, you’ll have a viable apartment to rent without extremely high costs.
If you already have a finished basement family room with insulation, waterproofing, plumbing, and electricity, you’re most of the way to creating an apartment. The living room alone accounts for about 41% of the costs, so you’re not spending too much if that area is already done.
As each element of a remodel costs a different amount, let’s look at a breakdown of the different projects you may need to do during a remodel.
HVAC: $3,300 to $5,900
Flooring: $6 to $10 per square foot
Drywall: $1.60 to $2.35 per square foot
Electrical panel: $850 to $1,700
Interior painting: $1.50 per square foot
Plumbing: $2,000 to $5,000
Bathroom addition: $2,500 and up
Kitchenette or wet bar addition: $3,000 and up
Closet addition: $1,000 and up
These numbers may seem high, but here’s some perspective: finishing your basement costs about 80% less than buying a larger home. When you consider that you could transform your simple basement family room into an entire apartment, the price of the remodel is a steal.
When you rent out your finished basement apartment, you can pay off the costs fairly quickly with your tenants’ contributions. If the remodel costs you $40,000, you would be able to charge your tenants just over $1000 per month and recoup your costs in a little more than 3 years. For a couple or a small family, this would be a pretty affordable monthly rent payment.
If you’re interested in starting your basement remodel before the recession’s effects are noticeable, contact Elkstone, Inc today. By having experienced professionals working on your basement apartment, you can rest easy knowing that you will have high-quality work that lasts for years to come.
For adults across America, the possibility of another recession is an intimidating one. While experts don’t expect the next recession to impact the housing market as dramatically as it did during the great recession of 2008, it still has the potential to affect the lives of millions of individuals.
In the first part of this series, we discussed how renting out your basement as an apartment during a possible recession can protect others during hard times. This section will look at why a recession may cause more people to seek opportunities to rent a home rather than own one. With more people choosing to rent, you will have more reason to invest in basement finishing and rent out your home’s basement.
Part Two: You’ll Have A Place To Stay For The Growing Number Of Renters
People choose to rent for a variety of reasons, from wanting the freedom to move cities with ease to not having the funds for a large down payment. If a recession does come within the next couple of years, the challenge of qualifying for a mortgage will play a large role in the number of people who rent.
Household incomes tend to be squeezed a bit more tightly during a recession. For people who are currently renting, a tighter budget could mean that they are not able to make the jump to homeownership as they had planned. They’ll have a lower price point for a potential home and that decreased price might not exist in the housing market during a recession.
Younger generations of potential homebuyers may also face the delay of their homeownership dreams during a recession. To qualify for a mortgage you need good credit, stable employment, enough money for a substantial down payment, and a favorable income-to-debt ratio. This last requirement is tough for many millennials who have considerable student loan debts from pursuing a college education. Unless these former students have a job that pays them enough to fund a down payment and offset their student loan debt, they will have to continue renting throughout the recession.
The renting demographic is also changing to include older Americans as well. Recent research shows that the number of renter households aged 60 and older increased from 6.5 million to 9.4 million between 2007 and 2017. As an increase of 43%, this outpaces the 7% increase of people in their 20s and early 30s jointing the renting demographic. This increase in older Americans renting likely comes from them not wanting to deal with the costs of maintaining a large home now empty of children and from the lower incomes that many people face after retirement.
Cater To The Renter’s Market With Professional Basement Finishing
With more people of all ages choosing to rent a home rather than buy it, now is the perfect time for you to invest in basement finishing. By performing basement renovations that transform your downstairs space into a comfortable apartment, you can meet the needs of the increasing number of renters in the United States. As basements are typically rented out at 50% to 75% of the monthly mortgage cost, you can see financial benefits from a basement remodel as well.
Contact ElkStone today to learn more about how basement remodeling can benefit your family. If you start your basement finishing project before the recession hits, you’ll be ready to provide an affordable home for the many renters in your area.
Since the great recession of 2008, many people have coped with the fear of a financial crash coming back around. While we all endured the difficulties that followed, we also learned how to thrive in times of trial.
At the end of the day, there’s no telling when a recession will strike. While we can keep a keen eye on the markets, the best way to help your family prosper in times of hardship is by investing in your home. In this series, we’ll touch on some of the primary benefits of a basement remodel and how this transformation can protect your family — and your assets — from financial difficulties.
Part one: Protecting others
If you own a house, you’re already doing better than many other people in the housing market. In fact, more people rent than own nowadays, but it isn’t because the thought of a mortgage is scary; this trend is especially prominent in young people who are coping with the burden of student loans and debt. While many might be working to improve their credit, others simply don’t have the ability to get a sizable loan from the bank for a mortgage. When rent costs increase, it’s not uncommon for families to fall on hard times.
Here’s where your basement remodel can help. When a family begins to struggle, they often need to downsize their living space to survive. The thought of a basement apartment once struck fear or distaste in the hearts of renters, but this option has become an increasingly valued piece of real estate. Many basement remodels lean toward luxury and even feature fireplaces, wet bars, and full bathrooms.
Your basement remodeling project can give them that place to stay.
For families who need to get back on their feet during a recession, a basement in-law suite or remodeled family room can help them thrive. Better yet, it can ensure that your family has a steady source of income during an otherwise unprosperous time. This recession-proof idea is a great way to protect your family and the livelihood of your renters.
Renting out a remodeled basement typically costs less for the landlords and renters alike since these spaces are easy to heat and cool, especially if you choose to install a fireplace.
Additionally, many basements are easily equipped with a separate entrance to ensure the privacy of both parties involved. You can rent on a month-by-month basis to help encourage the family to get back on their feet — some renters who opt for a year-long lease or more might feel trapped by their landlord in times of financial struggle. By renting your space and accommodating their needs, you’re proving that you want to see the renting family’s situation improve. If you rent to a family you know, this also comes with a few added social benefits. Get ready for many warm days sitting by the fireplace with your friends and rest easy knowing that your remodel has helped them.
5Getting your basement ready right now is the best way to cover your assets before the next big recession hits. In fact, the current cost of a basement renovation only averages $55 per square foot. While we all hope that it’s many years away, a full basement remodel can give you the peace of mind you need. Whether you’re looking to spruce up a finished basement with a fireplace or you want to transform your entire basement, you can rely on Elkstone to help you and your renters.
Did you know that finishing your basement can give you a 77.6% return on your investment?
Whether you want new basement family rooms, extra space to rent out, or just an added bedroom for guests, basement remodeling is an ideal way to get more value out of the space you already have. The following are the top seven steps you should take to transform your basement into a livable space.
1. Measure Your Basement
You’ll want to know just how much space you’re working with. Most importantly, though, you’ll need to know the height of your basement before you follow through with any more of your building plans. Most building codes and regulations require that a basement be at least seven feet tall to be fit for basement remodeling and finishing.
Along the way, before you plan any new building project, it’s always important to check local building codes to make sure your desires are in line with the law.
2. Inspect Existing Construction Quality
If your basement is unfinished, it may not have plumbing or wiring already. If this is the case, you will need to have your basement remodeling company install the wiring and plumbing themselves. However, if your basement has wiring or plumbing installed already, it will need to be inspected to ensure it’s up to quality standards and local building codes.
Keep in mind that a permit is required to inspect and modify plumbing or electrical wiring, so you will probably want to leave this to your basement remodeling company as well.
The next step in the process of remodeling an unfinished basement is to install insulation. Not only will this provide warmth during the winter, but it will keep unwanted noise out of your basement and unwanted basement noises out of the rest of your home. Insulated panels, batting, or other materials may be used to provide this insulation and noise protection. Important wall renovation choices may come into play here, so it’s integral that you consider all of your options carefully going forward.
Next, you’ll want to add moisture protection to your basement. When you live in a basement, you need vapor barriers to keep moisture from spreading past the concrete walls. This is something you should keep in mind as you think about basement living space ideas.
4. Install the Right Egress Windows
As you study basement building codes, you’ll find that one of the most important safety features in any basement is its windows.
Besides letting light in, egress windows are essential for doubling as escape hatches in case of emergency. If there’s a fire on an upper floor or some other emergency, you don’t want anyone getting trapped in the basement.
It may be necessary to expand window spaces and renovate your foundation in to make room for proper egress windows. This is an absolute necessity for a livable basement space, so don’t skimp on cost here.
5. Inspect for Radon
Radon is a specific kind of radiation that rises from the earth in certain areas. It isn’t found everywhere, but if present it can turn a comfortable home into a death trap. If you live in a location where radon can be a problem, you should get a radon test kit or hire a contractor to check radon levels in your basement.
6. Check for Rot and Pest Damage
Inspect the wood, concrete, and stone making up your basement and foundation for damage caused by moisture or pests, such as rodents or termites. To proceed with building plans, any moisture issues must be addressed, pests must be exterminated or blocked out of your home, and any rotting or damaged materials must be replaced.
7. Install a Sump Pump
If you live in an area prone to heavy rainfall or if your house rests in a fairly low area, there’s no questioning it: your basement needs a sump pump. Groundwater can destroy a finished basement if allowed to sit for prolonged periods. With your basement getting upgraded, you don’t want to come home from a vacation and discover that your basement transformed into a lake during your absence.
Over time your use of your home changes, leading you to remodel some areas to suit your new-found preferences. In their quest to redesign their living spaces, American homeowners spent $394 billion in 2018 alone. One popular space to redesign is the basement family room, which is often 80% cheaper to finish than buying a bigger house.
Basement family rooms are catching on not just for their functional utility but also because they increase a home’s value. If you are considering redoing your basement, read these tips to help you get the most out of your space.
1. Lean Towards Neutral Colors
When you’re designing basement family rooms, you have to keep in mind the kind of traffic that will come into the room. It most likely will not only be you and your family members who’ll use the room. Your friends and extended family might also use your basement family room periodically. Thus, you must look for ways to make the room feel bigger than it is to welcome those who use it.
Neutral colors tend to make space feel more expansive. Some examples of light neutral colors to make the room feel more open include taupe, white, and gray. Aside from using these colors on your basement finishing paint, you can also use furniture with a similar color scheme. For a splash of color, you can use brightly colored throw pillows to add vibrancy.
2. Don’t Build on Top of a Concrete Slab
Basement family rooms are an investment, and as such you need to guard against adverse weather conditions wrecking what you put up. When your drainage fails to redirect rainwater or melted snow away from the house, it inevitably results in basement moisture. When you’re planning your basement remodel, you need to plan on preventing mildew and moisture.
Enhancing air circulation in your basement is one vital way you can reduce potential moisture and mildew. Avoid building the family room’s floor directly on top of the concrete slab. Instead, use a breathable subflooring product to improve the air circulation by creating a gap between the concrete slab and the room’s floor.
3. Seal the Cracks
It’s no use creating intricate basement family rooms on top of questionable foundational conditions that might put your safety into question. When you begin your basement remodeling, you should first inspect the space for cracks on the walls and floor before getting any work done. Any present cracks are the priority on your basement renovation, and you should fill them using a carbon fiber repair solution.
4. Roll out an Open Plan
If your basement is like that of many other homes, then it leans a bit on the small side. To make maximum use of it, consider going with an open plan that balances the use of the room. Instead of using walls which will take up more space and make your basement feel even smaller, you can apportion the room by function.
For example, you can use a sofa, a large rug, and mood lighting to designate one part of the basement as a relaxation point. In the other section, you can add task lighting, craft spaces, and a table.
5. Let There Be Light
Basement family rooms exist in underground spaces. As a result, they often have the smallest windows in the house and that makes the space rather dark. To bring more light in, you can use light fixtures that save on space such as wall lamps, table lamps, and wall sconces. Throw in some mirrors to reflect the light in the room and brighten things up.
Remodeling as a homeowner helps you add more function to your space in line with your ever-evolving needs. Creating a basement family area is popular since it adds more value to the home while giving you more space to enjoy time together as a family. Balance the structural and stylistic elements to create an appealing basement family room.