Basement Remodel Budget Tips

There are countless ways a finished basement can elevate your home—from home offices to guest rooms to movie rooms and more. With the right planning, your vision can become a reality. So if you're looking to add value to your home, finishing your basement could be a great option.

It starts with your vision—then comes the plan

What are you looking to create from your unfinished basement? A home office? A playroom for the kids? A golf simulator? Home cinema? Guest rooms?

Depending on your goals, there are a lot of costs to factor in, including technology, insulation, electrical, duct work and more. A solid, workable plan will let you know where you may have to compromise—and where you can dream bigger.

Budgeting is essential, so be smart when considering costs

According to Forbes, the average cost to finish a basement is between $20,000-$80,000. Of course, this number depends on many factors.

• How large of a space needs to be redone?

• What are you looking to do with the space?

• Will you need to divide the space?

• Will your remodel involve new wiring or plumbing?

• Does your home's foundation need work?

• Will you be adding any windows?

These are just a few of the questions you'll have to find answers to or plan for, but relax! Even with all the questions, a smart approach and solid budget will see you through.

A good rule of thumb for budgeting: Forbes says labor will take up about 40% of your budget.

Another larger expense could be waterproofing your basement, which could cost around $4,500. Waterproofing will help with mold and mildew which can become costly in the future, and even render your remodel useless if unchecked.

Vision, plan and budget are set. What's next?

Once you have your vision, plan and budget set, you may want to explore some different options to cover the costs of your remodel.

If you're interested in accessing cash from your home's available equity WITHOUT touching your low first mortgage rate, you may want to consider a home equity line of credit (HELOC) or a fixed-rate home equity loan.

Many homeowners like the flexibility of a HELOC because it acts much like a revolving line of credit, and you only have to pay back the interest and amount that you draw from your line of credit.

How much of your home's equity is available? Use this Equity Estimator to estimate what you may be able to borrow.