Deciding between finishing your basement and building a home addition is one of the biggest choices Central Iowa homeowners face. Both options add livable space, but costs, timelines, and long-term value differ significantly. This guide helps you make a confident decision for your family and budget.
TLDR: Basement finishing in the Des Moines metro typically costs $35,000-$90,000 with about 70% ROI, while home additions run $100,000+ with 30-35% ROI. Basements offer better returns per dollar, but additions provide full above-grade value. Your best choice depends on lot size, lifestyle needs, and how long you plan to stay.
You need more space. Maybe that unfinished basement has sat empty for years, or your kitchen feels cramped every time family visits. The question is: what is the smartest way to add square footage without blowing your budget?
Both options work well in Central Iowa. Your best choice depends on your lot, your lifestyle, and how long you plan to stay in your home.
2026 Cost Comparison in Des Moines Area
Basement Finishing Costs
Finishing a basement in the Des Moines metro typically costs around $45,000 on average.
| Cost Level | Price Range | Cost Per Sqft |
|---|---|---|
| Budget | $35,000-$45,000 | $7-$15 |
| Mid-Range | $45,000-$70,000 | $32-$45 |
| High-End | $70,000-$90,000+ | $50-$100+ |
Tip: The biggest cost surprises come from moisture issues. Have your contractor check for water intrusion before quoting. Fixing problems first can add $3,000-$15,000 but protects your investment.
Home Addition Costs
Additions cost significantly more because you are building from the ground up. Expect $250-$500 per square foot.
| Addition Type | Typical Cost | Typical Size |
|---|---|---|
| Bedroom + Bath | $100,000-$140,000 | 300-400 sqft |
| Primary Suite | $145,000-$200,000+ | 400-500 sqft |
| Kitchen Expansion | $100,000-$150,000 | 250-350 sqft |
ROI and Resale Value
A finished basement typically returns about 70% of your investment at resale. Spend $50,000, expect roughly $35,000 added to home value.
However, appraisers value basement space at only about 50% of above-grade square footage. A 1,000-square-foot finished basement does not equal a 1,000-square-foot addition in appraised value.
| Project Type | Typical ROI | Valuation Approach |
|---|---|---|
| Finished Basement | ~70% | 50% of above-grade value |
| Home Addition | 30-35% | 100% above-grade value |
Illustrative scenario: A Grimes family finished their 800-square-foot basement with a bedroom, bath, and entertainment area for $52,000. When they sold, the basement helped them list $38,000 higher than comparable homes.
When Each Option Makes Sense
Choose Basement Finishing When:
- You already have unfinished space with good ceiling height
- Your lot has tight setbacks preventing outward expansion
- You need a home office, gym, theater, or teen hangout space
- You want tornado-safe living space in Iowa’s severe weather season
Choose Home Addition When:
- You need main-floor bedroom space for accessibility
- Your kitchen is too cramped to reconfigure
- You have deep yards typical of pre-1990 neighborhoods
- Natural light is a priority
Tip: If you plan to stay 10+ years, focus on lifestyle value over ROI. ROI matters most when selling within five years.
Iowa-Specific Concerns
Basement Considerations
Iowa basements face moisture challenges from clay-heavy soils. Essential elements include functioning sump pumps with battery backup, vapor barriers, and moisture-resistant materials. The Department of Energy recommends R-25 insulation for basement walls in cold climates like Iowa.
Radon is critical. Iowa has the highest radon levels in the nation, with 71.6% of homes above the EPA action level. Test your home and mitigate if levels reach 4 pCi/L or higher. Mitigation costs $800-$1,500.
Egress windows are required for basement bedrooms. The International Residential Code requires minimum 5.7 square feet of clear opening. Adding an egress window typically costs $3,000-$6,000.
Addition Considerations
Iowa’s frost line extends 42-48 inches below grade. Addition foundations must reach this depth, adding costs compared to warmer climates. Structural tie-ins between old and new construction require careful engineering to prevent settling cracks.
One advantage of basement finishing: the space doubles as a tornado shelter.
Quick Decision Guide
| Your Priority | Lean Basement | Lean Addition |
|---|---|---|
| Maximum ROI | ✓ | |
| Main-floor bedroom | ✓ | |
| Budget under $60,000 | ✓ | |
| Aging in place | ✓ | |
| Tornado safe room | ✓ | |
| Natural light priority | ✓ |
FAQ
Is finishing a basement cheaper than an addition? Yes. Basements run $35,000-$90,000 versus $100,000+ for additions because the foundation and walls already exist.
Will my finished basement count as square footage? Appraisers typically value finished basement space at about 50% of above-grade square footage.
Do I need permits? Yes. All Des Moines metro cities require building permits for both basement finishing and home additions.
Key Takeaways
Cost: Basement finishing $35,000-$90,000 vs. additions $100,000-$200,000+
ROI: Basement ~70% vs. addition ~30-35%
Best for basements: Tight lots, entertainment space, tornado safety, budget under $60,000
Best for additions: Main-floor living, kitchen expansion, accessibility needs
Ready to Decide? Contact Busy Builders
Busy Builders has helped over 1,000 Central Iowa homeowners since 2020 make smart space decisions. We offer free consultations and serve Des Moines, West Des Moines, Ankeny, Waukee, and communities throughout Central Iowa.
Call: 844-435-9800
Visit: busybuildersiowa.com
Busy Builders | Full Service Remodeling and Construction Done Right | Serving Central Iowa Since 2020
