Creating the Ultimate Finished Basement: Renovation Ideas & Budget Advice

A beautiful furnished basement entertainment space

What this article is all about:


Getting Started

Every home’s basement is different, and many of them are full of untapped potential. If you’ve been considering adding onto or expanding your home, you should stop to consider what’s underneath your home first. Cellar levels can be renovated for a variety of uses, with much less disturbance than a full expansion or addition to the upper part of the house. Advance planning is paramount when undertaking a full-scale remodeling project of this size. Use this resource guide to help you set a budget and design the finished basement you’ve always wanted.

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Why Remodel Your Basement

Basement spaces, when left unfinished, are often cold and cheerless areas used primarily for storage and laundry. Though frequently underutilized, many basements have the potential to be molded into more comfortable, livable spaces — you just have to be prepared for the hard work and cost of the remodeling.

Homeowners undertake basement renovations for a variety of reasons. Needing more office space, wanting a playroom for the kids, or having a grown up child move back home are all excellent motives for finishing your underground space. Basements also make for fantastic entertainment rooms, wine cellars, and home theaters.

If you plan to sell your home in the near future and want to remodel the basement to increase your resale value, there are a few things you should consider. Because of the highly personal nature of basement renovation projects, the typical return on investment is usually lower than other home remodeling projects. According to the 2015 Remodeling Magazine Report, the average return on investment (ROI) of a basement remodel is 72.8 percent.

Keep that percentage in mind as you select materials and draw up floor plans for your basement renovation. Remember that over a quarter of what you spend on this project will likely not be recouped during a home sale, so if you are indeed remodeling to increase your home’s value, keep the renovations simple and generic. Any customizations you make should be purely for your personal enjoyment.

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Your Basement Renovation Budget

Average costs

Varying basement sizes and personalizations during a typical basement remodel make the average cost of renovation difficult to pin down. Simple changes, such as adding drywall and flooring, can cost significantly less than creating a fully functional basement apartment.

Because much of the construction done during a basement remodel involves working with or around plumbing, electrical wiring, ducts, and other highly technical aspects of your home, many homeowners would benefit greatly from expert assistance. Additionally, the damp, humid nature of basements and the high probability that the space will experience flooding at some point means that you will need to select building materials that are waterproof or mold and moisture-resistant. These specialized materials will keep your home free of mildew and help prevent water damage, but they do come at a higher price point.

The 2015 Remodeling Magazine Report for a mid-range remodel estimates the cost for refinishing a basement at $65,442. Their hypothetical average basement is a 20-by-30-foot space, and the renovation cost includes building an entertainment area with a fully equipped wet bar, a full 5-by-8-foot bathroom, recessed lighting fixtures, laminate flooring, and features a 24 foot partition to close off the mechanical area.

However, you can reduce the price tag of your basement renovation by reining in your personal preferences, the basement layout, the materials, and the cost of labor. lists the national average cost of remodeling a basement at $18,468 with costs running between $10,000 to $27,000. And according to Angie’s List, the average cost is around $28,000, with expenses anywhere from $15,000 all the way up to $100,000. Ultimately, the differences in these averages comes down to the fact that no two basements are alike, and the each homeowner’s plans for their finished space are unique.

While these average cost estimates are not specific to your situation, they are a good starting point from which to build a realistic budget for your project. The biggest factors influencing your budget will be the square footage of your basement, the materials you choose, and the cost of labor, which varies depending on where you live.

How to create a budget

Start the budgeting process by determining how much you can realistically afford to spend on remodeling your basement. From there, you can adjust the extent of your renovation to fit your financial situation.

Once you feel prepared to tackle a basement remodeling project, take a look at our 5-step process for defining your budget to get started.

1) Determine the changes you’d like to make in your basement. This is the fun part. Imagine what your ideal basement space would look like, and what functionalities it would provide. Are you trying to create a game and entertainment room for family and friends to enjoy? Or perhaps you want to build a basement studio apartment to bring in more income? Consider all of your options, and when you’re ready, answer the questions below to help you formulate your budget.

General layout:


Functional features:


Decorative elements:


2) Select the materials you plan on using. Choosing your desired building materials upfront will allow you to compare pricing and stick as closely as possible to your budget. As you consider various materials, make sure you are checking that the items in question are moisture-resistant or waterproof, as dampness, humidity, and flooding are frequent basement issues. The following materials may be required for your basement renovation:


3) Calculate the total cost of labor and materials. If you are exceptionally handy and plan on tackling the majority of your basement renovation yourself, the prices of your desired materials will give you a good cost estimate for your budget. Remember to include the cost of your building permits.

However, if you don’t feel equipped to handle a remodeling project of this magnitude, then you may want to enlist the help of a general contractor. If you choose to hire a contractor, says you should expect 20-30 percent of your budget to go toward materials and 70-75 percent to labor and expenses. The split between these two items is decidedly skewed because of the unique nature of every basement, and is uncommon in other room renovations. While in most cases remodeling a room would create a more even division of labor and materials, finishing a basement may require a considerable amount of installation, rewiring, and other manual work before you even begin to add finishings.

Request quotes from multiple licensed contractors in your area to find the best rates and value for your project. A good general contractor can also manage the local permitting process and inspection of your space, and will bring together the right team of professionals to work on your renovations.

4) Leave a buffer for unforeseen expenses. As most renovation veterans could tell you, unexpected expenses can and do occur. Basements are especially tricky areas prone to leakage and water damage, and it’s impossible to know what you may uncover as you delve into the depths of your basement’s nooks and crannies. Include a financial cushion to cover unforeseen costs.

5) Adjust your plans as needed. If the cost of labor, permits, materials, and the cushion you’ve set aside for unexpected expenses is less than or equal to your proposed budget, then you’re ready to get started! However, if you wrote out the figures for all expenses and came up with a much larger number, you’ll have to go back to the drawing board and reconfigure your plans and expectations. A general contractor will also be able to help you reduce your budget to a more reasonable (and realistic) number.

According to, a typical basement-finishing project labor cost breakdown looks like this:

Remodeling task Service provider Basic cost range
Develop basement ideas Interior designer $355 – $594
Complete basement design Architect $1,093 – $1,826
Specify materials Interior designer $178 – $297
Remove flooring Demolition laborer $0.92 – $1.53 per square foot
Frame basement walls Carpenter $2.19 – $3.83 per square foot
Prepare basement flooring Flooring contractor $6.10 – $10.46 per square foot
Install appliance circuit Electrician $308 – $525
Insulate basement walls Insulation contractor $2.65 – $4.75
Insulate basement ceiling Insulation contractor $1.34 – $2.30 per square foot
Install sheetrock Drywall & plaster contractor $1.28 – $2.24 per square foot
Skim coat Drywall contractor $0.87 – $1.52 per square foot
Install interior door Finish carpenter $149 – $258 per door
Install door jam Finish carpenter $67 – $112 per door
Install base molding Finish carpenter $3.29 – $5.73 per linear foot
Install basement window Finish carpenter $424 – $761
Paint rooms Painting contractor $3.83 – $6.53 per square foot
Install linoleum flooring Flooring contractor $2.89 – $5.29
Install ceiling lighting Electrician $67 – $120
Install electric baseboard heater Electrician $161 – $280


Ways to save money

The best way to save money when renovating your basement is to scale down your plans for the project. In fact, choosing not to add a bathroom in the basement could save you as much as $5,000, according to Does your finished basement really need a home theater space or a separate bedroom? By minimizing your plans and layout, you can see significant savings.

If you reduce the scope of your remodeling project and still find yourself above budget, then reconsider your desired building materials. Choose less expensive finishes over customized pieces. For example, you could opt for faux-wood vinyl flooring rather than real hardwood floors. (That hardwood may warp if water seeps into the basement, anyway.) If there’s something on the list that you really don’t want to compromise on, then choose to splurge on that item and see where you can cut costs elsewhere.

Doing a considerable amount of the handiwork yourself will also save you big bucks. On the other hand, not everyone is equipped with the right tools and abilities to take on a DIY basement renovation. Painting walls and installing trim are fairly simple, but messing with your home’s plumbing or wiring can have serious safety consequences. Not to mention the cost of hiring a professional to correct your work if it’s not done correctly or to code. You should also contemplate how much free time you will have to work on remodeling your basement. Large scale renovation projects can take weeks, months, or even years to complete — especially if you only do work on the weekends. And don’t forget that your basement space will be in various states of completion during the process. How long are you willing to deal with such a disruption in your home?

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Three Things Every Basement Needs

In order to keep your finished basement safe and able to pass inspection, these important features are necessary.

Waterproofing measures

Regardless of whether your basement has a history of flooding or not, you will want to take preemptive measures to assure that your newly finished basement will not become water damaged. This is a problem to tackle before you begin any other kind of construction, as it will truly be the foundation your remodeled basement stands on.

According to This Old House, the majority of basement water problems are caused by uncontrolled roof runoff. In order to curb the problem, you’ll want to start by fixing any cracks in your foundation, clearing your gutters of debris, and monitoring where the gutters dump water in your yard.

If those immediate fixes don’t solve your water issues, then you may want to consider paying a professional to install or repair a sump pump or foundation drains. This kind of work can be expensive, but it is highly effective at keeping water out of your soon-to-be-finished basement space.

7-foot or higher ceilings

The International Residential Code (IRC) requires a basement living space (i.e. any space including bathrooms, hallways, laundry rooms, or bedrooms) to have a 7-foot ceiling or higher. The code does makes some allowances for structural beams, ducts, girders, or other obstructions that may hang 6 feet 4 inches above the floor. However, ceilings any less than 7 feet high will make your space feel exceptionally cramped and uncomfortable – especially if you have tall friends.

Emergency escape or egress window

Once you know your ceilings are up to code, the next requisite item to include is an emergency escape or egress window. Building codes usually require a habitable basement space to have an emergency exit other than the staircase leading into your home. In basements with bedrooms, each bedroom would need its own escape exit to pass inspection.

Building an egress window, which is essentially a large window well that would allow a person to exit safely and quickly in case of an emergency, can be an extensive and costly procedure. However, your new basement space will likely not pass inspection without it, and spaces not built to code can cause issues later on if you try to sell your home.

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Resource Center & Glossary

Key terms – in plain English

Egress window – A window large enough to meet local building code requirements to be used as an emergency exit. Egress windows usually include a window well equipped with stairs or a ladder for an easy exit.

Roof runoff – Water that runs off the roof of your home during a storm.

Sump pump – A pump used to remove water that has accumulated in a water collecting sump basin. The water enters the basin via exterior foundation drains on the perimeter of the home, and funnels into the basin during rain storms or when snow melts.

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