Is it comfortable for you financially to do the basement renovations? Specifically, are you putting yourself in risky financial situations by taking on additional debt? If yes, then I'd say that it probably isn't worth it. My general philosophy is that if you have to stretch to the point where it's uncomfortable financially, then you're risking more than just a profit or return, and in that case you would probably be better off selling and making a different investment. Renovations can go wrong and the costs and timeline can increase significantly. On the other hand, if it's just a matter of the cost being more than you would like to spend, but not problematic, then I think that's a different scenario.
If you finished the basement but did not make it a separate rental unit, do you know how that would impact the long term rental potential? Capitol Hill is an area where there is significant demand for whole house rentals, particularly larger spaces (there are more apartments than homes for rent). My thought is finishing the basement but not creating a separate unit would likely be a fraction of the cost and maybe see a better return.
This is a pretty complex scenario to analyze, you may want to seek the advice of an experienced real estate agent in your area who might be able to give you better estimates on rental projections and resale potential.
