What is a Finished Basement?

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Finishing the basement of a house is a common way to add more living space, increase the value of the house and fully utilize the area. A finished basement is any basement that has walls, floors, and ceilings similar to the other rooms in the house. This means that a finished basement goes beyond bare concrete walls, floors, and ceilings.

What You Should Know

  • For a basement to be considered finished it needs to have walls, ceilings, and floors that resemble the rest of the house, as well as a permanent heating/cooling system and interior entrance
  • Some of the steps in finishing a basement can be completed by the homeowner, while others require the services of licensed professionals
  • You should check the permits and inspections required to finish your basement before starting
  • The average cost of finishing a basement in the U.S. ranges from $2,800 to $33,985, with an average of $18,395 for 400 - 1,500 square footage
  • 90% of the homes built in the U.S. states in the north have basements, while less than 1% of the homes in the south do

What classifies as a finished basement?

There are a number of factors that determine whether your basement is finished or not. If you have already made a few renovations to your basement, however, are not sure if it can be classified as finished yet, consider the following:

Heating and Cooling - In order for a basement to be considered finished, it needs to have a permanent system of heating and cooling installed. If you are currently using a system attached to the window, wall furnace, or swamp cooler, then your basement is not finished yet, as these solutions are temporary. You need to have an HVAC unit that matches the rest of the house to finish your basement.

Access - A finished basement should be accessible from within the house, or in other words, have permanent stairs that connect it to the rest of the house. If your basement can only be accessed by an exterior entrance, then it is not finished. Ladders are not permanent either, so your basement will not classify as finished.

Floors - If the floor of your basement does not match the floors of the rest of the house, this is a sign that your basement is unfinished. A basement with a floor made of concrete or plywood is not accepted as finished. You would need tiles, carpet, wood, or laminate for your floors to finish the basement. Since basements have higher chances of being flooded, tiles are a preferred option.

Walls and Ceiling - As with the floors, the walls of your basement should be similar to the walls in other areas of the house. Concrete walls don’t count as finished. The walls and ceiling should be drywall.

How to finish a basement step-by-step

Finishing your house’s basement can seem like an overwhelming project, so breaking it down into steps can help you have a better idea of where to start.

1 - Decide on what you want to use the basement for

If you want the finished basement to be an entertainment area where you and your family can play board games, watch a movie or just relax in, then you wouldn’t need to install a kitchen for it. The same goes for when you want to turn the basement into a home office. However, if you want to rent the basement out, then you would need a kitchen and full bathroom in it.

2 - Plan the layout of the basement

In this step, you will decide whether you want a kitchen, bedrooms, bathrooms, how many you would need, and where you want them to be. This is a crucial step as not every layout is possible. For example, since every room needs to have a window, the bedrooms need to be positioned along the perimeter of the basement. The plumbing and electrical system need to be taken into consideration as well. Moreover, you can plan out your furniture placings too to make the most out of the living space.

At this point, it would also be a good idea to check if you need any remodeling permits and research any other requirements. A local building inspector can help you do this.

3 - Check the ceiling height

While regulation on the ceiling height of finished basements can differ depending on where you live, typically, finished basement ceilings should be at least 7 feet high. This means that if your ceiling is 7 feet or less prior to making renovations, then you might not be eligible to finish it. To be sure of this, consider asking a local contractor whether you are able to finish your basement or not.

4 - Test for moisture

A simple way to check for moisture is to attach a piece of plastic sheet onto the wall and leave it there for a couple of weeks. If you then find water underneath the sheet, it means that the foundation is not sealed and there may be cracks in the wall. On the other hand, if there are water droplets on top of the plastic sheet, it means that there is moisture in the basement.

It is crucial to make sure that everything is sealed before going forward to the next steps because if you cover up a problem, it might cost you a lot more in the long run. If your basement has flooded before or there is water buildup anywhere in the basement, consider installing a sump pump or two.

5 - Check for sagging floor joists

Sagging floors are a safety hazard and a sign that your floor may have structural problems. There are a few signs that can indicate sagging floor joists, such as rotten wood, unleveled doors, and window frames, cracks in the interior drywall, etc. It costs $1,000 up to $10,000 to fix sagging floors depending on how severe the problem is.

6 - Electrical and plumbing

Since you probably won’t be able to cover these areas yourself, you will need to hire a certified electrician and plumber for jobs such as wiring the basement, adding breakers, installing the bathroom, etc. You should check whether you need a permit for the plumbing work.

7 - Insulate the basement

Insulating your basement walls will reduce thermal loss, which will help keep the basement warmer and it will reduce humidity. A common choice to insulate a basement is using spray foam.

8 - Frame the walls and install the drywall

After sealing and insulating the walls, you will have to frame the walls. This process involves building a wooden structure of horizontal and vertical studs, wall plates, and lintels. This will serve as a basis where you will put the drywall panels.

9 - Install basement flooring

At this point, you will need to choose the material you want your floors to be. Make sure the material will not easily be damaged by moisture. Tile floors are a popular choice. Remember that just as you did with the walls, you need to seal the concrete floors with a waterproofing material first.

10 - Figure out where you need help

Since you now have an idea of the main steps in finishing a basement, you can decide which parts you can handle yourself and in which parts you will need help from licensed professionals. This will help you in your final step of calculating the costs.

11 - Calculate the total cost of the project

Starting from materials to the labor of professional workers, you can now make an estimation of how much money finishing your basement will cost you. This is an important step in determining whether you can afford it, how much you can afford, and identify where there is potential for cost-saving.

How much does it cost to finish a basement?

According to HomeAdvisor, the costs of finishing a basement typically range from $2,800 to $33,985, with an average of $18,395 for 400 - 1,500 square footage. However, depending on where you live, the size of your basement, and how much of the work you are willing to do yourself, the project can cost more or less than the average.

Cost Breakdown

The cost of finishing up a basement can be separated into 3 main categories:

  • Permits - When finishing a basement, you will need to conduct some electrical and plumbing work, such as when adding a bathroom. In doing this, there might be zoning ordinances that you need to consider. Moreover, a safety inspection is often required for your finished basement. To account for all these costs of permits and inspections that need to be conducted, you can budget an amount of $1,600.
  • Materials - Most of the steps outlined in the previous section require some materials to complete. All these materials will need to be taken into account when calculating the final cost of finishing a basement. This is an unavoidable cost since you will still need to purchase the materials even if you plan to do most of the work yourself without hiring professionals.
  • Labor - There are different types of work that need to be done when finishing a basement, some of which require professionals in different fields. For example, during the project, you will probably need electricians, plumbers, installers of framing, drywall, insulation, flooring, etc. Although, you can save if you decide to do some of the tasks yourself. It is a good idea to hire a general contractor to oversee the work.
Finishing TaskCost
Waterproofing$4,500
Insulation$1,650
Framing$1,795
Drywalling$1,750
Painting$1,800
Flooring$2,950
Electrical$1,325
Lighting$2,880
Sump pump install$575
Outlets$1,100
Permits$1,350
Source: HomeAdvisor

Costs per Square Foot

To get a better idea of what it will cost to finish your basement, you might want to use the average costs per square foot as they more accurately reflect the costs related to the specific size of your basement. The average cost per square foot to finish a basement is $7 to $23, with an average of $15/square foot.

Below are some of the main costs in square feet of some of the tasks that you need to account for.

Drywalling a Basement
Drywall Panels$12 - $20
Installing Drywall$ 2
Framing a Basement
Framing with no drywall$7 - $16
Framing with drywall$20 - $30
Basement Ceiling
Drop Ceiling$2 - $6
Tongue and groove wood paneling$1 - $3
Spray painting$100/ day (to rent a spray painter)
Basement Flooring Installation
Hardwood$22
Laminate$3 - $11
Sealing and Waterproofing
Waterproofing$5 - $10
Basement Design Cost
Interior designers$5 - $15
Consultation$500 (One-time fee)
Source: HomeAdvisor

Cost of Adding a Bathroom

Your basement finishing costs do not include the costs involved in adding a bathroom in your basement. Depending on whether you have some bathroom features in your basement and on the price of the bathroom fixtures you choose, the cost of adding a bathroom can range from $5,000 to $50,000.

Cost of Adding a Kitchen

Installing a kitchen in the basement requires a lot of electrical and plumbing work, which is why this addition is one of the most expensive. A kitchen can cost from $48,000 to $95,000 for 200 square feet. If you are on a tight budget, consider installing a kitchenette instead.

Finished Basements in the U.S.

Basements are not common in every state in the U.S. This is mainly because of the climate and the type of soil in different states, which may not be suitable to have a basement. That is why depending on where you live, houses with basements can be easy or difficult to find.

West vs East

Finished basements are more popular in the states in the West than in the East. The states where basements are most common are the West North Central states, which include Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota. Here, approximately 40% of new homes are built with basements.

On the other hand, 20% of the homes built in the East North Central states have a basement. These states include Illinois, Indiana, Michigan, Ohio, and Wisconsin. Both these regions have a similar climate which is characterized by cold winters and warm summers, which can be the reason why there is not a drastic difference in the presence of homes with basements.

North vs South

Going from North to South, there is a major decline in the availability of homes with basements. According to Basement Guides, 90% of the homes in the north have basements, while less than 1% of the homes in the south do. States located in the West South Central division, including Arkansas, Louisiana, Oklahoma, and Texas, have a basement inclusion rate of 0.05%. Moreover, even the basements that do exist are typically unfinished.

This drastic divide is mainly caused by the difference in climate and the type of soil. The soil in the south is very sandy, which makes it unsuitable for basements. Moreover, the water table is very high in some regions which means that you can not build a basement.

How much value does a finished basement add to a home?

On average, a finished basement has a return on investment of 70 - 75%. This means that if you spend $40,000 in finishing the basement of the house, the value of the house will increase by $28,000 to $30,000.

Depending on the additions that you make to your finished basements, the return on investment can be higher. For example, if you have added a bathroom or kitchen to your basement, then the value of your home will increase more since these additions are very valuable.

A finished basement with a bathroom and kitchen can yield returns not only at the moment the house is sold but also if you use it to generate rental income. However, keep in mind that if you do plan to rent the basement out, there are restrictions that you will need to consider beforehand.

Any calculators or content on this page is provided for general information purposes only. Casaplorer does not guarantee the accuracy of information shown and is not responsible for any consequences of its use.