Basement Finishing Costs

The thought of finishing your basement can be daunting, especially if you don't know how much to budget for the costs.  The cost of your basement finishing project can vary depending on the finishes that are chosen and the amount of space to be finished.

Industry standards state that the average cost to finish a basement is $30 per square foot, but the following project comparison shows how this benchmark may or may not hold true:

Project A:  750 Square Foot Basement with Basic Finishes

• Assume that Project A is a Denver basement finish that consists of finishing 750 square feet of space, including 1 bedroom and 1/2 bathroom.  The finishes chosen are basic including entry level carpet, paint-grade base trim and doors, and one paint color throughout the space.  
  
• This particular basement could roughly cost $26,000 with basic finishes, which puts the price per square foot at $35 ($26,000 divided by 750 square feet).
  
• Next, let's assume that the home was purchased for $310,000, and has 1700 square feet of space (excluding the basement), which puts the price per square foot of living space (excluding the basement) at $182.
  
• What's the bottom line?  The advantage to finishing the basement in this example is that the price to finish the basement is $35 per square foot, which is quite a bit less than the cost of finished living space in the home at $182 per square foot. 

In this example, the cost of finishing the basement is close to the industry standard of $30 per square foot, and the project also allows the homeowner to acquire more living space in the basement at a rate less than purchasing another house with more square feet.

Project B: 1600 Square Foot Basement with Top-of-the-Line Finishes

• Assume that Project B is also a Denver basement finish, but this one consists of finishing 1600 square feet of space including 1 bedroom and 3/4 bathroom.  The finishes chosen are more elaborate than Project A, and include elaborate custom-built entertainment niches, a home theatre, and stain-grade base trim and doors, drywall cutouts and a tray ceiling with enhanced lighting. 
• This particular basement could roughly cost $90,000 depending on the finishes chosen, which puts the price per square foot at $56 ($90,000 divided by 1600 square feet).
• Next, let's assume that the home was purchased for $500,000, and has 2700 square feet of space (excluding the basement), which puts the price per square foot of living space (excluding the basement) at $185.

In this example, the cost of finishing the basement is well above the industry standard of $30 per square foot, at $56 per square foot.  However, the homeowner still stands to gain a significant advantage by finishing his/her basement because the cost of finishing the basement is far below the cost to buy a different house with more square footage.

The key to any basement finishing project is to ensure that you have a very clear grasp of the costs, and have realistic expectations about the finishes that will be provided.  Make sure to ask potential basement finishing contractors to provide you with line-item details in their bids, along with examples of the finishes they have assumed to build their pricing.

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