How Much Does It Cost to Turn a Basement into a Rental Suite

Converting a basement into a rental suite or ADU typically costs $40,000 to $120,000, depending on layout, plumbing, and finishes. The average price per square foot ranges from $20 to $45, and rental income can offset costs within five to seven years.

Transforming an unfinished basement into a rental-ready living space is one of the most profitable home upgrades for Denver-area homeowners. Costs typically range from $40,000 to $120,000, depending on the size of the basement, plumbing needs, and finish level.

According to Houzz, adding a full bathroom, kitchen, and separate entrance drives costs higher, but also significantly boosts long-term property value and monthly rental income.

Sustainable Design Build specializes in designing and building Accessory Dwelling Units (ADUs), including basement suites that meet all code and zoning requirements in Denver, Wheat Ridge, and surrounding communities.

What Factors Influence the Cost of a Basement ADU Conversion?

The final cost depends on several factors that impact construction complexity and compliance:

• Plumbing and Electrical: Installing or upgrading utilities for kitchens and bathrooms is the most significant cost driver.
• Egress Windows: Required by local code for safety and natural light in sleeping areas.
• Insulation and Soundproofing: Critical for tenant comfort and noise reduction between levels.
• Finishes and Fixtures: Flooring, cabinetry, and lighting choices affect both quality and price.
• Separate Entrances and HVAC Zones: Provide independence and energy efficiency for tenants.

SDB’s design-build approach ensures every one of these elements is coordinated efficiently, preventing costly changes later in the project.

Is Converting a Basement into a Rental Suite Worth It?

Yes. Basement rental suites can provide steady passive income and improve property value by up to 30%. A well-designed ADU can generate $1,000–$2,000 per month in rent, depending on location and amenities.

Beyond financial benefits, a basement conversion allows for multi-generational living, giving homeowners flexibility for extended family or future tenants. This dual-purpose design often increases market appeal and makes properties more competitive in Denver’s housing market.

What Are the Legal Requirements for a Basement Rental in Denver?

Denver and neighboring cities like Wheat Ridge require ADUs to meet specific building and zoning codes, which often include:

• Minimum ceiling heights
• Fire-rated insulation and drywall
• Proper ventilation and egress windows
• Independent electrical and plumbing systems

The City of Denver offers detailed ADU guidance, but these requirements can vary by municipality. Sustainable Design Build manages the entire permitting and compliance process, ensuring your basement rental meets all local regulations and passes inspection the first time.

How Long Does a Basement-to-ADU Conversion Take?

The average timeline for a basement ADU project is three to six months, depending on design complexity and permit processing. Projects requiring full plumbing or structural modifications may extend beyond that range, especially during busy permitting periods.

SDB streamlines the process by managing both design and construction internally, ensuring the project stays on schedule and aligned with your budget.

What’s the Return on Investment for a Basement Rental Suite?

Basement ADUs typically achieve an ROI of 65–80%, one of the highest returns among home renovations. The added income stream helps homeowners recoup costs faster than with traditional remodels.

With Denver’s strong rental demand, homeowners often recover their investment within five to seven years, especially in desirable areas with separate entrances and private amenities.

Start Your Basement Rental Conversion with Sustainable Design Build

Whether you’re creating a guest suite, in-law apartment, or income-generating ADU, Sustainable Design Build provides end-to-end design-build solutions tailored to your goals. Their team handles 3D design, permits, and turnkey construction, ensuring your basement transformation is code-compliant, stylish, and profitable.

Schedule a consultation today to learn how your basement can become one of your home’s most valuable investments.