Finishing a basement is a great way to add to your home's livable square footage, and it can serve as a major selling point when you put your house on the market.

But basements can be tricky. Many homes have moisture and flooding issues in the basement because the space is below grade, making it prone to take on water from the ground outside. That’s not to mention the heating, plumbing and electrical systems that are all commanded from the basement. So how do you make a finished basement attractive yet accessible for the necessary systems in your home?

Before you start covering your foundation with drywall, examine your basement and address any concerns you may have – whether it’s flooding on rainy days, humidity levels or worries about the state of your foundation. Once you’ve covered the bare bones of your basement with drywall, problems may not be obvious until the fix – and the price for that fix – has gotten significantly bigger.

[See: 12 Home Improvement Shortcuts That Are a Bad Idea.]

Hold off until you’ve addressed moisture issues. Waterproofing is imperative before finishing your basement, otherwise you’ll have to redo it once water damage or extreme moisture ruins drywall, carpeting and other items.

A backup sump pump and concrete sealer can reduce the chances of moisture sitting in your basement, but because basements can take on moisture differently depending on their construction and location, you should consult a waterproofing specialist.

David Schrock, owner and founder of Basement Spaces Inc. in Aurora, Illinois, will not work on a basement until moisture or water issues have been addressed. “I would make sure they contact a waterproofer prior to any kind of water issues, and make sure those are resolved before putting walls and things in,” Schrock says.

Get permits and an inspection. It may seem like a no-brainer, but many home improvement DIY-ers skip this part of the process – and it often ends badly. A permit ensures you know what local ordinances require so any space you build is safe, and a follow-up inspection verifies it’s been done correctly.

“That’ll at least make sure that things are done the way they’re supposed to be,” Schrock says.

Plus, an unpermitted space can prove expensive when selling your home. Buyers may reduce their offer when they discover the space isn’t legal, demand it be inspected and permitted or drop their offer altogether.

Test for radon. An elevated level of radon gas is the second-leading cause of lung cancer among Americans after smoking, according to the Environmental Protection Agency.

If you haven’t tested for radon in two years, it’s time to do it again. And if you’re looking to finish your basement, focus the test down there, as radon gas enters the home through the foundation, and you’ll be spending more time below ground if you’re planning a game room or movie theater.

“Even if the radon level doesn’t go up in the time they finish the basement, the amount of time they spend in the basement goes up. So they’ve essentially increased their chance of contracting lung cancer because it changes their habits,” says Nick Gromicko, founder of the International Association of Certified Home Inspectors.

[Read: Is Your Home a Death Trap? What You Need to Know About Radon in Your Home.]

Create a second exit. If you’re planning to create a bedroom in your basement, most local codes will require an alternative way for people to get out, aside from stairs to the main floor, in an emergency. “Most basements aren’t built to be exited easily during a fire,” Gromicko says.

There are two primary options for creating a second exit point: an enlarged window or a door. The first requires digging a window well, with a window large enough for a person to fit through and easily get outside. Otherwise you could add a full-size door with stairs on the outside or the classic cellar-style doors with stairs inside the basement.

Both require some digging and will likely come with a hefty price, but it’s necessary to avoid anyone being trapped in the basement if a fire starts in the home. A Bilco brand cellar door and installation will cost between $3,500 and $6,000, says Jack H. Milne Jr., president of Tri-County Inspection Company, based in southern Pennsylvania and central and southern New Jersey.

Install firestopping in the walls. Many local permits will also require preventive measures to keep a fire from spreading throughout your home.

Firestopping a wall keeps a fire contained. It's typically done with horizontal blocks of wood and fire-resistant sealant between the wall and ceiling, and floor and ceiling to create a barrier between stories.

“Say a fire breaks out in an outlet, it would go up the wall. And if you didn’t have the firestopping there, it would travel up the joist space and go elsewhere,” Schrock says. Proper firestopping helps prevent a fire from immediately spreading through the home from inside the walls and is instrumental in reducing the damage a house fire can inflict.

Even if your local government doesn’t include firestopping in permit requirements, it’s a measure you should take when doing construction on any room – not just the basement – to better protect your entire home.

Don’t box in your furnace. As you start putting up walls, your instinct may be to cover up the furnace and other unsightly appliances. But be aware of what you’re boxing in so you don't create a serious danger to everyone in the home.

A furnace that’s trapped in a tight space doesn’t have enough fresh air for combustion. “It causes the furnace to backdraft and often create a carbon monoxide poisoning issue,” Gromicko says.

An easy way to hide your furnace is to put a door with a vent on the furnace room, ensuring air can always flow in and out.

[See: 8 Easy Renovation Projects Every Homeowner Can Do Now.]

Keep everything accessible. But the furnace isn’t the only thing in your basement you want easily accessible. A basement is the home to most systems – from water shutoff valves to your heat, electric panels and other wires – that keep your home running properly.

The last thing you want to do is wall everything up, only to have to cut holes every time you need to do maintenance. Whether you opt for access panels at strategic spots or a drop ceiling with removable panels, the goal is easy entry to systems lining your basement.

“You never want to lose the convenience that a basement can offer. And that may be for pipes, wires, speaker wire [or] hose bibs that you have to shut off for the winter,” Milne says. “You always want to have access.”

Tags: real estate, housing, home improvements, safety


Devon Thorsby is the Real Estate editor at U.S. News & World Report, where she writes consumer-focused articles about the homebuying and selling process, home improvement, tenant rights and the state of the housing market.

She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.

Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at dthorsby@usnews.com.