Estimating the Cost to Finish a Basement: 6 Considerations

Peter Chambers

Feb 14, 2023

estimating the cost to finish a basement

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Maybe you’ve decided to get in on the Airbnb craze by converting your basement into a vacation rental. Perhaps you want to build an in-law suite for older relatives or adult children, saving money for a home of their own. Either way, you’ve decided to finish your basement. 

However, you want to stay on the right side of the law, especially if you intend to rent to outsiders. Furthermore, failure to do so could impact your resale value. Getting your remodel into compliance will require some expense. Here are six things to consider when estimating the cost to finish a basement. 

1. Egress

Before converting your basement into a living space, you need to ensure two routes of egress and ingress. Some basements feature this configuration already. You can enter or exit through the main house or a separate cellar door, typically located around the side or rear of the home. If not, you’ll have to add a second exit. Otherwise, those within could be trapped in case of fire. 

If you plan to create a mother-in-law suite, you could save money with an egress window. Although they aren’t typically used to enter and exit a basement, they serve as an emergency exit when necessary. Typical costs are between $3,000 and $5,000.

However, if you’re planning on renting the area out to strangers, it should have a separate entrance. Fortunately, this doesn’t cost much more than an egress window — your estimate should be roughly the same, depending on your region and home’s foundation. 

2. Plumbing 

Even if you plan to have relatives in your basement, it’s inconvenient to come up and down the stairs to use the facilities. Running water and a working bathroom are musts if renting to strangers. 

The overall cost varies widely, ranging from $3,000 to $25,000. Plumbing alone will cost $2,000 or more when you include basic fixtures. 

When installing your bathroom, please keep accessibility at the forefront, regardless of whether you rent to strangers or relatives. You never know what life could bring. The doorway should meet ADA requirements for size, and grab bars near toilets and in the shower allow those who use mobility aids to feel safer tending to their needs. 

3. Insulation 

There’s good news and bad news about basement temperatures. Such spaces stay comfortably cool in summer but can be chilly in winter. 

First, determine if you have water seepage. Tape a piece of plastic sheeting to the wall with duct tape and wait about 48 hours. If condensation appears, you must correct the problem first or end up with toxic mold issues and possible foundation cracks later. 

Then, insulate the space. Products like Aerogel and Thermacork are more environmentally friendly choices than artificial chemical-based products, and you can feel secure knowing you have fewer VOCs than fiberglass. 

4. Flooring 

Basement floors are notoriously chilly, but you can make yours toasty with the right underlayment and flooring choice. However, you must ensure a minimum ceiling height of at least seven feet to remain in compliance. 

What should you use? Carpeting is warm on cold feet in the morning. However, it can trap dirt and germs, making it a questionable choice when renting to strangers. In such cases, a low-pile carpet is better than shag. 

Other choices include hardwood and vinyl laminate. Tile and stone are additional options, but it could feel cold in this location. 

5. Wall and Ceiling Finishing

Some basements have finished walls and ceilings. Others are bare-bones, with joists showing and pipes exposed. While the latter makes insulation easier to install, you still have to consider this when estimating the cost to finish a basement. 

Drywall can range anywhere from $1,500 to $7,500, depending on the complexity of the task and whether you DIY it. Hiring a contractor to complete this step will add to your final costs. 

6. Furnishings

Finally, you’re ready to furnish your space. Unfortunately, this fun step can still cost a pretty penny. For example, the typical mattress alone costs anywhere from $600 to $1,800, which doesn’t include the bed frame. 

While you should go new with bedding, you can pickup other items secondhand — even free. Scour your local community directory, Nextdoor and Craigslist for upcoming yard, garage and estate sales. You can also sometimes find bargains on apps like OfferUp. If you live in a neighborhood with a community dumpster, keep your eyes peeled. Sometimes, folks dump things when they move that only need a little TLC to refinish like new. 

Cost to Finish a Basement 

If you want to transform your basement into living quarters, you have to follow the legal requirements. Don’t risk getting in trouble with your new attached apartment by failing to take the right steps. 

Consider the costs to finish a basement listed above when compiling your estimate. It’s much easier to finance your dream project when you know how much you need. 

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