Many homeowners don't realize the value add of basement renovations. Not only will a livable basement add value to your home in the eyes of potential home buyers, but it can also add square footage and actual appraisal value to the home. A complete basement renovation may not be as costly as one may believe and will likely add tremendous value in relation to cost. Here are five easy-to-follow steps to renovating a basement.

Step 1: Design a Plan

This is critical for any home renovation, but particularly for basement renovations. Decide what kind of rooms the basement needs as well as what will increase the asking price the greatest amount. Depending on the size and shape of the space, everything from a simple game room to a complete two bedroom apartment with kitchen and baths can be incorporated into the basement renovation. Having a plan is the key to maximize value without waste.

Step 2: Decide to Hire a Professional or Do It Yourself

Unless the homeowner is a home renovation professional, it is strongly suggested that a competent professional be hired to complete the basement renovation. Basements are notorious for having issues such as mold and dampness that can only be addressed properly by someone who is skilled and experienced in these areas. Remember, it's far cheaper to build it right the first time than to have to tear it out and start again.

Step 3: Framing

This step to renovating a basement refers to smoothing out the walls with dry wall or other materials. Studs of wood or metal are placed against the raw walls after any needed waterproofing is completed. These studs are the frame that will hold the new drywall in place. Ceilings and floors are also framed to hold the required surface material. Don't forget insulation or soundproofing if the new rooms will require it.

Step 4: Bathrooms

Bathrooms make any basement more livable and friendly. The homeowner needs to decide what type of bathroom to install. Anything from a simple powder room to an elaborate steam shower can be appropriate. Remember to match the bathroom to the price range of the home for maximum return on investment. A $50k bathroom in a $120k home makes little sense!

Step 5: Don't Forget Storage

Storage is key for a renovated basement. Create storage areas that blend into the environment, but make them generous and even larger than expected. New home owners love extra storage even if they would never use all of it. Storage adds tremendous value to a basement renovation in everyone's eyes.