1. Finish Your Basement
This is the first step. If your basement is unfinished or gets wet and flooded, you can do nothing else to improve it without waterproofing and finishing the area.
What does finishing mean?
First, make sure that the room is waterproofed. This means to deal with drainage issues in your yard and around your foundation. If you have water problems, you may need the outer walls waterproofed and braced. A vapor barrier might be put on the inside of your basement walls, but, this only works if the outside has been waterproofed.
After this, you want to have a good floor put in (or simply condition your cement floor and have that waterproofed as well. You can keep your cement or block walls and paint them with cement paint. Or, you can have drywall and studs put in. But, only do this if the area has been waterproofed! Otherwise, you run the risk of water damage and dangerous mold growth.
2. Add Rooms
Once your basement is finished and waterproofed, you can now add rooms to it. If you want to simply keep the area as a storage space, some simple shelving is good. But, if you want to turn it into a living area, adding rooms like:
- A second kitchen
- Bar
- Entertainment room
- Living room
- Bedrooms (make sure they are ventilated and have an egress window for safety)
- Bathrooms
- Workout rooms or home gyms
- Home office
- Meditation rooms
- Play room for the kids
- Play room for your dogs, cats and other pets
The possibilities are pretty unlimited. Any room you can have in your main home you can add to your basement.
If you want, you can even turn those new rooms into an apartment. This is a good source of passive income for many home owners as it is easy to find college students or young people looking for a private, yet fairly cheap, place to live. Some studies show that you can get up to 60% of your mortgage cost in monthly rent if you use your basement as an apartment.
Obviously, you need to have an outside entrance (Bilco doors or any kind of sturdy outside door), steps and egress windows. The egress windows are necessary, by law, in most communities. They provide a safe escape route in case of fire or other emergency.
