Finishing a basement often is the most cost-effective way to increase a home’s living space—one of several reasons that the appeal of a finished basement has been on the rise in recent years. Expenses tend to be around 30% to 50% lower than the cost of putting a similarly sized addition on the home. And you can expect to recoup more than three-quarters of the cost when you sell, according to Remodeling magazine, a better payback rate than most home-renovation projects.

Also, limited exposure to natural light makes basements the perfect place for today’s big-screen high-definition home theaters and media rooms…and the privacy of basements makes them an attractive place to add bedrooms for adult children and aging parents—an increasingly common concern with multigenerational households on the rise.

But whether you’re finishing your basement yourself or paying a contractor, there are issues that must be considered before work begins…


In most towns, building codes require that finished basement ceilings be at least seven feet high. But don’t be fooled—a seven-foot ceiling will not make for an enjoyable space. Anything below seven feet, nine inches may feel cramped—and that figure refers to the height of the finished space. Finishing the ceiling and floor will subtract at least a few inches of headroom. So to achieve a seven-foot, nine-inch finished height, the unfinished space would need to be at least eight feet high.

What to do: Install a drywall ceiling rather than a drop ceiling. Drywall ceilings use up less headroom and look better. Costs are comparable. Drop ceilings often are selected because they provide easier access to valves in the pipes above. Instead, insert plastic access panels into a drywall ceiling as needed. ­Example: Access panels from Oatey start at less than $20 (

Paint basement ceilings and walls white. Light colors make tight spaces feel larger. Adding abundant artificial lighting can help, too. Install at least one recessed canister light in the basement ceiling for every 36 square feet of floor space, then add accent lights to eliminate any remaining dim areas. Use high-wattage LED bulbs.

Two options if ducts (or pipes) along the basement ceiling result in low ­headroom…

Have ducts rerouted. Perhaps they can be moved to sections of the basement that you are not finishing or at least to the edges of finished spaces where a strip of lower ceiling will be less obtrusive. Rerouting ducts typically costs $1,000 to $3,000, depending on the amount of work required.

Leave the ducts where they are and vary the level of the drywall ceiling. The finished ceiling can be high where there are no ducts and lower only where necessary. A multilevel ceiling might add a few thousand dollars to drywall installation costs. Install track lighting along the sides of the lower ceiling sections—that makes them seem like intentional design features.

If there is no way to avoid having a finished ceiling height of less than seven feet, nine inches, finishing the attic or adding an addition to the house might be better.


Water is enemy number one of finished basements. Even a small amount of moisture seeping in can lead to major mold or mildew problems.

What to do: If water leaks into your basement through cracks in your foundation—or through another route—have this remedied months before your basement-finishing project begins. That way you can be fairly confident that the problem is solved before wallboards and/or flooring block the area from view.

This is not a good time to try to save a few dollars by tackling a home-repair project yourself—a recurrence of the water problem could lead to thousands of dollars in damage to your newly finished basement. Hire a company that specializes in correcting basement water issues, not a general contractor. Choose one that has been in business for at least five years. These pros have many water-beating techniques, including injecting foundation cracks with advanced ­epoxies capable of stopping most minor leaks.

Additional waterproofing steps might include adding or improving roof gutters…modifying landscaping or excavating a “French drain” around the perimeter of the home to encourage water to flow away from the foundation…and/or installing a sump pump (with battery or generator backup).

Warning: Modern moisture-resistant wallboards are less susceptible to moisture problems than traditional drywall, but they are not a solution on their own. If water is consistently finding its way into the space between your foundation and your finished basement walls, it eventually will cause problems no ­matter what wallboards are used.

If you are installing a bathroom—or any other plumbing—in your finished basement, insist that your contractor include an “ejector pump” in the plans. This greatly reduces the odds that a backed-up sewer line or septic system will flood the basement.


Wood flooring is a poor choice for basements—flooding could ruin the floor, and wood floors typically are installed above a subfloor, further reducing headroom. Roll-out laminate floors tend to show the imperfections of the concrete floor below and might be damaged by flooding as well.

What to do: Two basement-flooring options are worth considering…

  • Laminate or vinyl interlocking tile or plank flooring systems will not be ruined if the basement floods. These tiles typically are not attached to the floor below, only to each other—a system referred to as “floating” tile—and can be removed, dried, then put back in place if necessary. Some effectively mimic the look of wood floors or stone tiles.

Laminate interlocking tile flooringExpect to pay perhaps $5 to $7 per square foot. Laminate tiles are constructed from layers of materials, with the core layer typically of high-density fiberboard, while vinyl floors are entirely vinyl. Either should handle moisture relatively well, though the typically more rigid laminate tiles might do a better job of hiding imperfections in a concrete basement floor. Example: ­Fusion Hybrid LVT (“luxury vinyl tile”) made by Floor Coverings International (

  • Carpeting makes finished basements feel warm and homey. It is susceptible to mold and mildew, however. Having mildew-resistant padding installed underneath can minimize—though not eliminate—this risk.

Potential compromise: Install interlocking vinyl tiles, then place area rugs on top. This offers some of the warmth of carpeting, and area rugs can be easily replaced (or done away with) if they develop mildew.


An unfinished basement might seem like a blank canvas, but some layouts work better than others.

What to do: Favor an open layout as much as possible. Unless it is unusually large, chopping a basement up into smaller rooms will make the spaces feel uncomfortably small—especially if you have relatively low ceilings and limited natural light.

Exception: Consider sectioning off part of the basement as a storage room. A lack of storage space is a common complaint of home owners who finish their entire basements. Leaving part of the basement unfinished also will reduce renovation costs.

If you must carve up your basement into separate rooms such as a bedroom, home office, media room or other specific spaces, consider these often-­overlooked factors…

  • Flow. Avoid layouts featuring long, windowless hallways…or that require you to pass through one basement room to get to another.
  • Zoning laws. Basement bedrooms might need windows, and they might have to be a specified size.
  • What’s above. A basement room that requires quiet, such as a home office or a bedroom, should not be directly below a loud upstairs space, such as a living room with a TV. A home theater should not be below an upstairs bedroom. Adding insulation above the basement ceiling won’t block all the noise.
  • Basement components. Furnaces and water pumps can be loud and annoying when they’re adjacent to a basement bedroom or home theater.
  • Existing plumbing. If you’re having a bathroom, laundry room or sink installed in the basement, position this below an upstairs room that has water pipes to control costs. It is worth paying extra to put the basement bathroom in a convenient spot, however.