How to Finish a Basement

Before you dive into a massive construction project, know the cost and process involved when finishing a basement.

U.S. News & World Report

How to Finish a Basement

a nice wine cellar / elegant, luxurious / also full of wine

If you desire that cozy wine cellar in your basement, prepare for a lengthy and expensive process.(Getty Images)

Finding more space for storage, bedrooms and a place to hang out in your home can seem like an impossible task.

But a basement, even if it’s currently an empty space with a concrete floor, bare walls and exposed ceiling, gives you some flexibility to expand the usable square footage of your home. There are plenty of opportunities to finish a basement and create a wine cellar, movie theater or home office. Of course, the process can be lengthy and expensive, depending on the necessary work and your plans for the space. But if the project gives you much-needed living space and adds value to your home, it's a worthy undertaking.

Here’s what you need to do to finish your basement:

  • Ensure the basement is waterproofed.
  • Add an egress for a bedroom if necessary.
  • Get proper permits from local municipality for your basement design.
  • Insulate pipes and make sure electrical wiring is properly covered.
  • Insulate and frame walls.
  • Install floor.
  • Install interior walls.
  • Put ceiling in place.
  • Complete decor and furnishing.

How Much Does It Cost to Finish a Basement?

Making a bare, unfinished basement habitable requires a lot of time and money. HomeAdvisor reports the average cost to frame out a basement and install walls, ceiling and floor is $15,000 for a 2,000-square-foot house. The more elaborate your basement plans, however, the higher the cost. A professional full-bathroom installation will cost between $10,000 and $15,000, according to HomeAdvisor. Adding an egress point, a door or window large enough for someone to get out in the event of a fire, to put a legal bedroom in the basement will also be a costly endeavor because it involves drilling into the foundation of the house.

However, a more realistic expectation may be higher than the recorded averages. Larry Janesky, founder and CEO of Total Basement Finishing and Basement Systems Inc. in Seymour, Connecticut, says homeowners can expect the cost to finish a basement to start at $20,000 and climb depending on the size of the space and how elaborate the plans are.

Here’s a breakdown of what you need to do to finish your basement.

Mold Mitigation and Waterproofing

Before starting construction in your basement, be sure the space isn’t letting in water that will damage any new floor or ceiling that you install.

There are a few ways to determine if your basement is effectively waterproofed, which is best interpreted by a professional. Mike DeGirolamo, owner of Triad Basement Waterproofing Inc. in Frederick, Maryland, says water marks on the walls of an unfinished basement can reveal that a basement isn't properly waterproofed, and in an already finished basement, you'll likely see water damage or mold on flooring or interior walls. “If someone has 3 inches of standing water, it’s a pretty clear sign that it’s not waterproofed,” he says.

Waterproofing a basement involves installing exterior drainage and sump pumps to prevent flooding. Often, a sump pump system will include multiple backup pumps in the event the first one fails.

If your basement isn’t already waterproofed and water isn’t getting in the basement, you may not need to go through the costly process. DeGirolamo says waterproofing a standard basement can be as much as $7,000 or $8,000, and the cost can climb to $15,000 for larger basements.

With flooding concerns taken care of, you will still have to combat higher humidity levels in the basement, which can cause damage and encourage mold growth. Janesky stresses that it's not a matter of whether humidity is high in your basement, because it's expected in any underground space: "The answer is yes, your basement does have moisture issues." A dehumidifying system can help keep your basement from being too moist, which is most common in the summer.

Permits and Inspections

If your plan for a finished basement includes adding a spare bedroom, you’ll need to create a second exit from the basement that goes directly outside, as is typically required by law for fire safety. This egress can be a complete set of stairs outside that leads to a door, or it can be a window large enough for a person to escape in case of a fire.

Additionally, many local governments require permits prior to construction and inspections to ensure plumbing and electrical work are done properly, the space is properly insulated and floors and walls are installed to ensure safety.

Even if the required number of inspections slows the project timeline and feels unnecessary, it’s important to keep in mind that the proper permitting and final approvals are important for when you sell your house in the future. Also, insuring your home for higher value because you finished the basement will likely be impossible without the right approvals and inspections from the city or county.


Prior to installing any walls or flooring, you want to ensure you’ve sealed the basement as much as possible to reduce drafts and loss of energy. That includes spray foam around the rim joist – where the ceiling meets the foundation of the home – replacing cheap basement windows with energy-efficient panes and installing a vapor barrier and insulation along the walls.

Some basement walls are first framed out with wood, and drywall is installed to complete the room. However, with elevated humidity levels below ground, you run the risk of mold growth, Janesky says.

Instead of wood and drywall, Janesky says his companies use foam insulation and cement board with a vinyl finish for the walls. These products help prevent mold growth and significant water damage, he says.

“If you’re going to modify a house, how long do you want the improvement to last? If the answer is, ‘Well, as long as the house,’ then you have to make it durable,” Janesky says.

When planning where you’ll place walls and create separate rooms for your basement, be sure you’re leaving plenty of space for ventilation surrounding the water heater, furnace, washing machine or any other major home appliances in your basement. While utility rooms can be separated from the finished portion of the basement, be sure any doors installed have a vent to keep air freely flowing throughout the space.


The ceiling is where Janesky says drywall doesn’t pose much of a risk. But if you’re looking to have easier access to the plumbing, wiring and ducts that run along the basement ceiling, a drop ceiling with removable panels may be your best option.

If your basement isn’t particularly tall, you may not be able to install a ceiling in order to meet local code requirements for head room. In this case, Janesky recommends having the ceiling – including any exposed joists, plumbing or ducts – spray-painted black for a formulaic look that helps mask the different textures, materials and imperfections in an exposed ceiling. He notes the walls and flooring will still make the space look finished, and the solid-colored exposed ceiling adds “a more industrial look.”


It’s not uncommon to see carpet or even a wood floor installed on a subfloor in a basement, which raises the floor above the colder concrete below. However, Janesky notes a subfloor can be dangerous because if the framing and plywood get wet, they will warp, sag and grow mold – and any flooring on top of the subfloor will be damaged as well.

“One little water event and it’ll buckle, and it’ll never dry under there,” Janesky says.

Instead, Janesky recommends vinyl materials, which can be made to look similar to hardwood or tile. For baseboards and trim, plastic is often a better choice than wood.

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