While many homeowners use basements as glorified storage rooms—reserving them for out-of-season decorations and outgrown clothing—the space is actually incredibly versatile. With a little imagination, you can turn the space into a recreation room for kids or a distraction-free home office, a guest bedroom or a yoga retreat. You can even turn your finished basement into a living space for your college-aged children or rent it out to make a little extra money.

Whatever you choose to do with your basement renovations, it’s important to take the time to define your goals and work with a professional to develop a remodeling plan. Then, address any issues and make improvements that will help your renovation to succeed.

Start with waterproofing and moisture-resistant framing materials. Add an egress window that meets state and federal requirements. This is a critical safety feature that was not required until the 1990s, so older homes frequently lack them. The installation process is labor intensive, but it’s a vital component for any basement remodel.

You’ll also want to address your electrical and plumbing needs, including bringing in new wiring and adding appliances. In most cases, you’ll need to secure building and other permits before starting the project. These requirements differ by municipality, so it’s best to contact your city hall for specifics.

If you want to increase the resale value of your property, you may decide to add a bathroom. This is a relatively inexpensive improvement, but it can have a significant impact on your home’s overall value.

Another popular basement renovation is turning the space into a spare bedroom or guest suite. This is a practical way to accommodate family and friends who visit, as well as a great option for empty-nesters looking to downsize. You’ll need to install a full bathroom and kitchenette before making it a suitable guest suite, but these additions won’t be as costly as adding an entire bedroom.

Once you’ve addressed any foundation problems and made structural improvements, the next step is installing drywall and flooring. Depending on the type of room you’re creating, you might opt for wood or laminate floors, tile in the bathroom or kitchen, or carpet in the rest of the space. It’s also essential to insulate the walls and ceiling to improve energy efficiency and reduce noise.

Don’t forget to add ample storage, either built-in or freestanding. You can create customized shelving and open cubbies in nooks and crannies, install custom closets in out-of-the-way stairwells, or add vertical storage units to the back of doors. Be sure to consider utilizing space under the stairs for storing out-of-season items and cleaning products. Finally, be sure to add a combination of ambient, task, and accent lighting to give the space a warm, inviting glow.