What’s the ROI of a Legal Finished Basement in 2025?

If you’ve ever looked at your unfinished basement and thought, “There’s so much we could do down here,” you’re absolutely right. In 2025, homeowners across the province are finally acting on that thought, not just to make more room, but to build serious value into their homes. A legal finished basement is one of the smartest investments you can make this year, whether you’re thinking long-term resale, extra income, or just a more flexible living setup.

We work with homeowners every day who are turning their basements into beautiful, functional spaces. But the big question is always the same: is it really worth the money?

Let’s walk through exactly what goes into building a legal basement in Hamilton, what it costs, and most importantly, what kind of return you can expect.

Why More GTA Homeowners Are Finishing Their Basements

Basements are not only for laundry anymore. As housing costs hold steady and the cost of moving up, so to speak, rises, families are choosing to stay put, and that means making better use of the space they already have. A finished basement is handy. It can be a legitimate apartment that generates rental income, a private suite for in-laws, a home office, or even a straight-out entertainment room. At Rich Home Inc., we’ve built all of those, and more. Legalizing the space makes it even more valuable. It gives homeowners peace of mind and adds a strong resale incentive for future buyers who want the same income potential or multi-use functionality.

Understanding the Basement Makeover Costs in 2025

Renovating a basement properly means accounting for everything, from structure and waterproofing to finishing touches. Here’s what homeowners typically spend, based on our actual project costs at Rich Home Inc.

Renovation Element	Cost Range
Building Permits	$1,000 – $2,500
Moisture Sealing	$2,000 – $15,000
Framing	$3,000 – $7,000
Electrical & Plumbing	$5,000+ (combined avg.)
Insulation & Drywall	$2,500 – $9,000
Flooring & Ceilings	$3,000 – $15,000
Painting	$1,200 – $4,500
Total Project Range	$30,000 – $75,000

These numbers reflect a range of project scopes, from straightforward layouts to more intricate designs with bars, bathrooms, or custom finishes. And while basement projects can sometimes go higher, we’ve completed high-performing, beautiful spaces within this range many times over.

What Kind of ROI Can You Expect From A Finished Basement Unit?

Let’s get to the big question: what kind of return are you getting?

A legal finished basement often adds 70% to 75% of its cost to your property’s value. So if your project comes in at $60,000, you’re likely boosting your home’s value by $42,000 to $45,000. But that’s just resale.

What many homeowners are after is income.

A legal basement apartment in the GTA can comfortably generate $1,200 to $2,000 per month in rental income. Depending on your location, that could mean $14,000 to $24,000 annually.

Here’s a simple example:

• Total renovation cost: $70,000
• Monthly rental income: $1,800
• Annual income: $21,600
• Estimated yearly expenses (maintenance, insurance, utilities): $4,000
• Net annual income: $17,600
• Return on Investment (ROI): 25.1%

This kind of return doesn’t just make the renovation “worth it.” It makes it one of the most strategic moves you can make as a homeowner in 2025.

Average Basement Apartment Rent by Region (2025):

• Toronto (Central/East/West): $1,700 – $2,400
• Mississauga/Brampton: $1,500 – $2,000
• Vaughan/Markham/Richmond Hill: $1,600 – $2,200
• Oshawa/Durham Region: $1,300 – $1,800
• Oakville/Burlington: $1,400 – $1,900
• Hamilton: $1,300 – $1,800

Based on these rents, many homeowners recover their renovation investment in 4 to 6 years through rental income alone.

ROI Snapshot Table

Investment	Monthly Rent	Annual Net Income*	ROI %
$60,000	$1,500	$14,000	23.3%
$90,000	$1,800	$17,600	19.5%
$120,000	$2,000	$20,000	16.6%

*Estimated after standard expenses

And this doesn’t even factor in appreciation or the added appeal to future buyers.

What You Can Do With a Finished Basement

While rental income is the obvious draw for some, we’ve worked with plenty of families who simply want to make better use of their space. And when designed well, the possibilities go far beyond just an extra bedroom.

Here are some of the most popular basement projects we complete:

Livable Basement Apartment

Complete, self-contained units with kitchens, bathrooms, separate entrances, and everything needed to rent legally. Our legal basement apartments typically range from $35,000 to $200,000, depending on the size and level of finish.

Entertainment Room

From cozy family movie nights to hangouts for the kids, basement entertainment rooms cost between $4,500 and $20,000, depending on your layout and features.

Home Gym

No more commuting to a packed gym. We build personalized fitness spaces for $4,500 to $25,000, with proper flooring, lighting, and smart storage.

Home Office

With remote work now a standard part of life, a soundproof basement office can be a game-changer. These setups typically cost $4,500 to $20,000, depending on technology and layout.

Basement Bar or Kitchen

From wet bars with storage to full gourmet kitchenettes, these builds range from $4,500 to $75,000, and they add a ton of lifestyle value.

Legal Basement Requirements That Matter

Finishing a basement isn’t just about design. If you want to build a legal apartment or just future-proof the space, you’ll need to meet Ontario Building Code requirements.

Here’s what that typically includes:

• Separate entrance
• Egress window(s) for emergency exit
• Minimum ceiling height (usually 6’5” or more)
• Smoke and CO detectors (interconnected)
• Fire separation between units
• Properly installed HVAC and ventilation
• Plumbing and electrical done to code
• Zoning compliance and permits

According to CMHC, there are an estimated 75,000 secondary suites in Toronto alone, with nearly one in six ground-oriented homes containing a legal or semi-legal basement unit. This highlights not only the scale of adoption but also the increasing reliance on these spaces to meet the city’s housing needs.

That tells us one thing: the market for legal basement apartments isn’t going anywhere. We manage this entire process for our clients, making sure nothing gets missed and every inspection passes the first time.

Budgeting for the Unexpected

Renovations never entirely go as planned. Especially in older homes, you can anticipate wiring that needs to be upgraded or plumbing that’s outdated. Leaks are also a common shock in basements. That’s why we recommend homeowners budget 10% to 15% for contingency. It isn’t always required, but when it is, you’ll be glad you budgeted for it. If you’d like to know more about constructing a legal basement suite and the steps needed and required, we’ve got an entire guide laying everything out for you should understand. Read our legal basement requirements blog for the full breakdown.

Real Advice From the Field

As a team that’s built dozens of basement spaces across the GTA, here are a few things we always tell homeowners before they start:

• Don’t underestimate moisture issues. A dry, sealed foundation is the base for everything else.
• Plan your layout with long-term use in mind. Even if you’re not renting now, a full bathroom and flexible space keep your options open.
• Lighting matters. Natural light is limited underground. Good lighting design is everything.
• Spend smart. Focus on insulation, soundproofing, and ventilation. They make the biggest difference in comfort and code compliance.

Is A Finished Basement Worth It?

For most GTA homebuyers, the answer is yes, and not just in financial terms. The lifestyle upside is immediate. You have space that’s right for you now and that sets you up for the future, whether that means income potential, resale value, or flexibility when your family does grow.

And if it’s done legally, the reward is not just numbers, it’s peace of mind.

At Rich Home Inc., we work with you from start to finish, developing basement spaces that are code-compliant, fit your lifestyle, and deliver enduring value. If you must develop a legal suite or simply make your home more habitable, we’ll get you there.

If your basement is waiting to be transformed into something more, the moment to do it is now, and we’re here when you’re ready.