How Much Is It to Finish a Basement?
Before we break down each of these costs in detail, you can expect the following high-level material and labor costs to finish a basement:-
- Materials: $7,750
- Labor: $300 – $500 per day for general contractors
- Electrical: $50 – $100/hour
- Plumbing: $100 – $900/hour
- Framing: $7 to $16 per linear foot
- Insulation: $2,000
- Drywall: $10 – $20/panel; with $2 per foot installation costs
- Flooring: $1 to $4 per square foot
- Furniture: Varies depending on how you decorate
- Designer: $100 – $500 per hour
Estimated Cost to Finish a Basement: Materials
When it comes to finishing a basement, the cost of materials required to complete the job can vary significantly. It depends on the current state of your basement. A basement filled with spiders and dirt floors is going to take a lot more than a partially finished basement that already has electricity and plumbing hooked up. According to Home Advisor, the average cost of materials for finishing a basement is $7,750. Required materials for finishing a basement include:-
- Drywall
- Insulation
- Framing
- Electrical wiring
- Painting
Labor
The cost of labor to complete a basement renovation can vary significantly depending on the size of the project and the complexity of the work. For those who aren’t DIYers, most basement remodels will require at least two professionals to complete the job. The first professional you’ll need to hire is a contractor to oversee the construction process. Contractors typically charge around $300 to $500 a day per Angi, depending on their experience and the complexity of the job. The second professional you’ll need to hire is a plumber or electrician, depending on the type of work being done. Plumbers typically charge well over $100 per hour (makes you rethink your choice of profession), while electricians usually charge $50-$100 per hour.DIYing to Cut the Average Price for Finishing a Basement
Right now, there’s a DIY craze happening. As a Millennial I totally get it. Spending thousands of dollars on contractors just isn’t feasible with student loans, huge mortgage payments, and the cost of copious amounts of Starbucks espresso. That doesn’t mean we shouldn’t have nice things. But there’s only so much you can learn with a can-do attitude and a hundred hours of YouTube videos. If you’re intending to use your finished basement as a rental unit, you need to make 100% sure your work is up to code. Unfortunately, fully understanding if you’re doing that or not comes from years of experience — something many DIYers just don’t have. The last thing you want to do is cause electrical issues or even fires by rewiring the basement yourself. So use caution when deciding which projects you’ll hire a professional for and which you’ll tackle on your own.Real estate investments? Awesome. Being a landlord? Less fun.
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Average Cost of Finishing a Basement Per Square Foot
Framing, insulation, and drywall are the essential elements in finishing a basement. Basements all come with some sort of wall, but they’re likely not insulated or not the most appealing to anyone who would be staying there. While this is often a more affordable part of finishing a basement, it can also be the most labor-intensive. How much it costs to frame, insulate, and drywall your basement will depend on the size of the space, the type of materials used, and the labor involved. Angi notes that drywall panels range between $10 – $20 per panel, and installation costs around $2 per square foot. Framing materials vary in cost depending on the type of wood required, but they can range from $7 to $16 per linear foot. Insulation, on the other hand, can cost about $2,000 on the lower end. In addition to the cost of labor and materials, you’ll also need to purchase the necessary tools, such as saws, nail guns, and ladders, if you don’t already have them. Expect to pay a few hundred dollars for these items. If you’re looking for a more accurate estimate for your basement, it’s best to get quotes from several contractors in your area to get a better idea of how much the project will cost.
Flooring
Again, most basements come with some type of flooring. That likely isn’t the flooring you’re going to want for renters or guests. Luckily, there are plenty of options in a range of prices for flooring. The most expensive type of flooring tends to be carpeting, which can cost anywhere from $1 to $4 per square foot, not including installation costs.
Think carefully about carpet, though. Has your basement ever flooded? If so, there’s a good chance it could happen again and without proper drainage, there goes your beautiful new carpeting. If you’re looking for a cheaper option, you can always opt for waterproof luxury vinyl tile or laminate flooring, which often costs less than a dollar per square foot.
Installing flooring yourself makes for a challenging task, especially if you have to install a brand-new floor from scratch. Professional installation costs more but generally comes with a longer warranty and fewer headaches. If you choose to hire a professional, factor in the cost of labor when budgeting for your flooring project. Again, check in with local flooring companies and tell them the type of flooring you’re thinking of and how big the space is you’re working with. They should be able to give you a quick, free quote.
Furniture
The costs for furniture and decor can vary significantly depending on the look you want to achieve. If you’re looking to keep the costs low, consider buying furniture and decorations secondhand, or finding versions of these items that fit within your budget. Consider investing in furniture pieces that can serve multiple purposes, such as an ottoman that provides both storage and a place to sit. Upgrading lighting fixtures is also a simple way to instantly change the look and feel of a space without breaking the bank. Invest in bright overhead lights, accent lamps, or even some wall sconces. If you’re handy, many of these fixtures can be installed yourself, saving you money in the long run. With a little bit of creativity and careful budgeting, you can give your basement a stylish and functional look without breaking the bank.Remodeling vs. Renovating
Remodeling and renovation both refer to changes made to existing structures and are often used interchangeably. However, remodeling usually denotes minor changes that may not require a major overhaul, and is usually cheaper than renovation. The costs of remodeling a basement can vary greatly depending on the extent of the work and the materials used. Remodeling a basement typically requires some surface-level work, such as painting or wallpaper, new flooring, or minor plumbing and electrical changes. This type of work can cost anywhere from a few hundred dollars to several thousand dollars, depending on the size of the basement, the materials used, and the labor involved. By contrast, a full renovation of a basement usually involves more extensive and costly work, such as tearing down existing walls, replacing fixtures, and running new wiring. Plus, if you’re trying to make the space a separate rental unit, you’ll need to install a new kitchen and a bathroom if you don’t already have one. These are huge, costly endeavors. Full renovations can cost anywhere from several thousand dollars to hundreds of thousands of dollars, depending on how much work needs to be done. Additionally, renovation work often requires permits and inspections, which can add to the overall costs.Don’t Forget About Extra Costs
Before you decide to renovate a basement with the purpose of renting it out, know that this very fact alone can add thousands to an already complicated project. Refinishing a basement for your own use can be a relatively simple project because you only need what you want in the space. Renters, on the other hand, need a full kitchen (or at least a kitchenette), their own bathroom and shower, and a private entrance. And these are just a few of the basics. You’ll also need to budget for things like:-
- Additional insurance. When you start renting out your basement unit, your insurance costs are going to jump. Landlords need insurance to protect them against any potential liability claims resulting from injury or damage to their rental properties. Landlord insurance covers the building, any outbuildings, contents, and in some instances, loss of rental income due to a tenant’s failure to pay rent.
- Emergency funds for broken items. Landlords need an emergency fund to cover unexpected expenses such as repairs to the property on short notice and legal fees due to tenant issues. It allows landlords to address unexpected problems quickly and prevents any potential disruption to tenants.
- Code enforcement. Having a rental property in compliance with applicable local, state, and federal laws is a responsibility all landlords must take seriously. This includes making sure the rental meets safety, health, and housing codes. Depending on the condition of the rental, landlords may need to do a significant amount of work to ensure their unit is up to code. Money will likely have to be spent on minor repairs, improved electrical and plumbing, painting, new locks, and security measures, among other things.
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ROI of Finishing a Basement
Finishing a basement can lead to a great return on investment (ROI) for homeowners. You’re adding more livable space to your home, so if you should ever sell, it has the potential to add more value to your home
According to a survey by Remodeling Magazine, an average basement remodeling project that costs about $71,000 can recoup as much as 70% of the total cost upon selling the house. Depending on the local real estate market, that can add up to thousands of dollars.
Of course, that doesn’t include rental income from renting out the basement as an accessory dwelling unit (ADU).
How Much Can You Make From Renting Out a Basement Unit?
Finishing your basement is a great investment for increasing the value of your home, but it can also generate additional income each month if you intend to rent the space out. With rent prices for apartments on the rise, more and more people are looking to rent out basement apartments, which are often a little cheaper, but still nice. How much you could make as a landlord largely depends on the location and amenities of the apartment.
These rental prices are general estimates and will vary based on the size of the apartment and any additional amenities. The great thing about renting out a basement apartment is that you can usually predict how much rent you will receive each month, giving you a steady stream of passive income.
Note that even if you don’t live in the property, you could still rent a basement apartment separately from the main house. Without separate utility meters and rezoning the property, you generally can’t sell it as a duplex, but you can still typically rent both units independently. Just make sure each unit has a separate entrance, and come up with a fair system for utility billing.
How to Save When Finishing a Basement
Finishing a basement project can be an expensive venture, but there are several ways to save money while still getting the outcome you want. Here are a few tips on how to save when finishing a basement.
Reuse Existing Items
If the basement is already partially finished, try to reuse existing items like doors, windows, and insulation. Reusing existing items can save you a significant amount of money and may even add some character to your basement project.
Shop for Discounted Materials
When tackling a basement remodel, shop around for the best deals on materials. Beyond home improvement stores, consider second-hand shops and salvage stores to find discounted materials.
Do the Labor Yourself
Okay, I know I gave a long speech above about how DIYing isn’t always the right choice for everyone, but it’s one of the best ways to keep your project budget low. If — and only if — you’re confident in your abilities or you have professional experience working in construction, consider going the do-it-yourself route. Just dedicate extra time to the project, as you’ll have to balance work and your home life, and taking on a large project like this takes time, no matter how much experience you may have.
Utilize Natural Light
Installing skylights or using reflective surfaces can help to better utilize existing natural light in the basement. Not only does this save money on electricity, but it also creates a more inviting atmosphere.
Final Thoughts
Whatever the scope of work for your basement finishing project, one thing is for sure: basement finishing can give you the most value for your money. With a well-executed plan and quality materials, you can transform your basement and effectively increase the value of your home.
Even so, most homeowners spend two-to-three times as much on renovation projects as they expect.
Before refinishing your basement consider the scope of work, the quality of materials and labor, and the various types of permits and inspections that may be required. Taking the time to research and plan everything carefully can ultimately help you find the best value and the highest quality work for your basement finishing project.♦
What’s your experience with the estimated cost of finishing a basement? Any tips to reduce the average cost of finishing a basement per square foot?
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About the Author
G. Brian Davis is a landlord, real estate investor, and co-founder of SparkRental. His mission: to help 5,000 people reach financial independence by replacing their 9-5 jobs with rental income. If you want to be one of them, join Brian & Deni for a free class on how to earn 15-50% returns on passive real estate syndications.
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Basement as an ADU is a project that depends on how convenient and cost-effective it is to convert your existing basement. Some are easy, others… not so much.
Very true Frank!
This has me thinking about my own basement, and how much it would cost to finish and convert to an ADU. Might be time for a conversation with the wife.
Glad it got you thinking Santi!
I’ve been renting my basement for 4 years. Never regretted it!
Glad to hear it Jacky!
I’ve been longing to do a basement project but my wife doesn’t want to “for many reasons.” When I showed her the math on rental income from a basement ADU though, she warmed up to the idea. Excited to get down there and start doing some demo.
Glad to hear it Bob!
Thanks for sharing this. I was just researching how much it costs to finish a basement, never even occurred to me to add an ADU. The rent from a basement ADU would make a huge difference in my budget.
Glad to hear it Jenn!