What Is the Return on a Kitchenette in a Basement Remodel?

Return on a Basement Remodel

• According to "Remodeling" magazine's Cost vs. Value Report for 2010 to 2011, the national average cost of a mid-range basement remodel was $64,519. That same remodel had a resale value of $45,186, which represents a 70 percent return on the investment. Note that these figures apply to a full basement remodel -- finishing an unfinished basement. Your kitchenette's value is proportionate to the value of the basement as a whole.

Basement vs. Living Area

• Your basement is appraised according to a different valuation standard than the rest of your home if it, or part of it, is below-grade. Below-grade areas of your home do have value, but they have less value because they're not considered "living area," even if they're habitable. How much value an appraiser assigns your basement depends on the size, the quality of the finish and its suitability for your location. This holds true for the kitchenette, too.

Best Use of the Space

• The highest and best use of your basement kitchenette has a strong impact on value. If your property is zoned for two-family housing and your home meets the building codes for such items as bathrooms, exits and window height, the kitchenette could add substantial value if it allows you to rent your basement as a separate apartment. On the other hand, if it's merely a convenience that enhances your enjoyment of the basement, the kitchenette has little value in its own right.

Suitability for Location

• You may have heard the adage that it's better to have the worst house in the best neighborhood than to have the best house in the worst neighborhood. This also applies to a home's features. A basement kitchenette has more value in a neighborhood where basement kitchenettes are typical, even if the others are nicer, than it does in a neighborhood that has no others.

Basement Kitchenettes Upon Resale

• Generally speaking, your basement kitchenette will be a value-added feature for the prospective buyers who tour your home. Although you won't be able to add the cost of the kitchenette to your home's price, the kitchenette may make your home compare more favorably to similar homes, and thus result in a faster sale or, perhaps, even a higher offering price.

Maximizing Your Return

• The best way to maximize the return on your investment in a basement kitchenette is to avoid overspending. If you're in an area where high-end kitchenettes are the norm, spend what you must for yours to compare favorably, but stick to a "good enough" standard. If your home is the only one in the neighborhood to have a kitchenette, make it part of a cohesive design that blends well with the rest of the basement, but keep it simple and spend as little as possible.