Justin and Kristin Schaack purchased their home within the last year and they love everything about it — except the lack of space to entertain. They consider adding a patio to the backyard but ultimately decide their $11,000 budget would be better spent finishing off the basement. Their plans include opening up the stairwell, hanging drywall, installing a ventilation system and adding carpet, built-in shelving and new lighting. They grab space from the adjacent room and frame in a nook to conceal a cabinet and refrigerator. With the framing completed, they hang drywall and hire a professional to install an air ventilation system.

The biggest expense in the basement makeover is the carpeting. To ensure that it's installed correctly, the homewners opt to hire professional installers. But they finish off the newly opened up stairwell themselves by installing a railing and newel post.

By making smart choices and tackling the projects they could handle themselves, the Schaaks managed to stay well under their initial budget. Here's the dollar breakdown for this complete makeover project in terms of project cost vs. equity boost:

Sweat Equity Value Tally

drywall $950
drywall labor $1,825
carpet and installation $2,070
railing, cabinet and shelving $260
paint $140
lighting $250

TOTAL = $6,995

realtor's estimated value increase = $16,000
total cost of material = $6,995

Net return on investment = $9,005

Below are some tips and information based on the homeowners experiences in this makeover.

• Before remodeling a basement, think about the future use of that room. Sometimes the best way is actually keeping a very flexible space that way you can change it into whatever you need it to be.

• When you put a drop ceiling in it automatically feels cheaper. You really want your space to look like the rest of your house. A drop ceiling will also take away precious ceiling height and make the space feel much smaller.

• It's a good idea to maximize space in the basement by adding built-ins shelving and storage areas. Check adjacent rooms for places you mat be able to steal space from. But don't go overboard with too many built-ins or too much woodwork because it could get very expensive and you're likely not to get a full return on your investment when it's time to sell. A good rule of thumb is to keep it simple and inexpensive, but make it attractive.

• As long as you are not masking some sort of problem like mold or mildew, an air purification system is a good way to make your basement smell as good as it looks.