Finishing a basement - to drywall or not?

Question

Living in Wisconsin I try to finish the basements whenever I can to provide additional living space for the our long winter season. Older houses usually come with paneling which I think is the worst solution. A complete drywall finish is the best, but also the most expensive. On the last house I tried a compromise - two sides drywall and on the other two sides we just painted the block wall which was in nice condition. Once the carpet was in it looked very nice, but the appraisal did not come in quite as good as I expected. Does anyone have experience with different solutions (paneling, drywall, block, mix,..) How does an appraiser look at them?

Marcus Auerbach · Answer

Rob, I think an appraiser told me once that a finished basement ads about $18 per square foot. I guess thats a number specific to our area, but I forgot to ask him what the definition of a finished basement is. I think what I have in mind is something like the definition of a bedroom: needs a closet and a full size window. What is required in a basement so it qualifies as finished?

The way we did it on the last project we ended up spending about $6000 for 500 sft, so about $12 per sft. That included two sides drywall, painted blockwalls, ceiling, cans, outlets, carpet and two prehung doors. Drywalling all four sides would have bumped the cost up to probably $15 or $16 giving me very little return on the investment.

On the other side I do like the fact that I have visibility and access to the block walls. Its always a little scary to inspect a potential deal and not being able to check the foundation walls. I just drafted a layout for another project and wonder if I should go drywall all the way arround or not. In this case we have one wall that has been braced 5-10 years ago. It apears to be stable and I can make a case for covering it up and for leaving it open. what do you think?

Rob Caldwell · Answer

I think you may have answered your own question.  In the eyes of the appraiser it will always be the addition or conversion that best matches the original structure.  We use a grading system from 1 to 5.  1 being the worst with 5 matching so closely to the original construction that it is almost indistinguishable.