To renovate basement or not for appraisal?

Question

I want my appraisal to be 275k. Should I talk to an appraiser before the bank gets an appraisal? Doing a cash out refinance.

Because of it's not going to appraise that high, I could finish the basement fairly easily. (And then it should definitely appraise that high.)

Thoughts? Specifically I could add a French door to a room to make it a bedroom. The basement can be made into two additional bedrooms. I would finish 4/6 rooms down there with proper egress and optional ventilation. It's a huge house with tall basement ceilings.

Ryan Irwin · Answer

Agree with what @Sofia Komrskova and @Jake Baker said here.

I would get together with your realtor, have them tour your property and then run comps to see what the value add would be, then simply pencil it out to determine the return.  An appraiser likely isn't going to spend time giving you much feedback in advance (unless you have a connection or they are super slow).

Jake Baker · Answer

@Adam Aero

I completely agree with @Sofia Komrskova about doing it to code.

Cost vs. Return:Finishing the basement and adding bedrooms can add significant value, especially if your local market places a premium on additional living space. That said, weigh the cost of renovations against the potential increase in appraisal. Get an estimate from a GC to get a good idea of what is required.

Market Comparables: Check what similar-sized homes with finished basements or additional bedrooms are appraising for in your area. An appraiser or local real estate agent can help with this.

Sofia Komrskova · Answer

If you can talk to a local appraiser before the refinance then ask them  what implications on appraisal price a finished basement would have. If it's net positive, then make sure to do it up to code, etc so the finished square space can count. If it won't have any effect then don't do it.

Pat Parrillo · Answer

Hi @Adam Aero

It's good to have goals in mind. My first question would be why $275K? Is there significance to this exact number?Knowing your current state comps is a great place to start and a real estate agent can help pull those figures quickly. If you’re below $275K, focus on high-impact upgrades like improving curb appeal (landscaping, fresh paint), refreshing the kitchen and bathrooms (new hardware, lighting), or adding energy-efficient features (smart thermostats, LED lighting). Outdoor spaces like a deck or patio can also boost value. I'd recommend starting with the lower hanging fruit than a large basement reno - if your comps are close but don't quite get you to your number.

Finishing the basement (with proper egress) could push you over the top, but confirm with an appraiser first to ensure it counts. Talking to an appraiser early is a smart move—they can guide you on what improvements will add the most value.

Don’t forget to fix any deferred maintenance and highlight unique features like tall ceilings or original hardwood floors.

Let us know how it goes, and feel free to ask more questions—we’re here to help! Good luck.

Vince Scipione · Answer

Its a great idea, but you will need to consult the township in order to understand their requirements for liveable space. Some townships will require certain items, like an escape window if below grade or a walkout to be installed. This could make or break the marketing of the property. You can finish it and consider it sq footage, but may not be able to adverise as bedrooms. Also if this property is on septic that also can throw a wrench into the ability to call a space "a bedroom" as septic systems are sized and permitted based on the bedrooms. My thoughts would be to discuss it first with the township, then have a qualified investment savvy realtor tour the home, get you a CMA on the current property and ARV to compare. Then involve a GC once you understand the scope of work. Run your numbers and then revisit! Hope this helps, Best of luck on your investments.

To renovate basement or not for appraisal?

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