Basement Finishing in Rexburg, Idaho
One of Idaho's fastest-growing cities, Rexburg is packed with new homes that have unfinished basements — and a massive student housing market that makes basement apartments one of the smartest investments in Eastern Idaho.
Why Rexburg Is a Basement Finishing Hotspot
Rexburg's story is one of explosive growth. The city has roughly doubled in population over the past 15 years, driven primarily by the expansion of Brigham Young University-Idaho (BYU-Idaho). With approximately 28,000 students enrolled across the university's three-track calendar system, Rexburg has a year-round demand for housing that few similarly sized cities in the country can match.
That growth has fueled a massive new construction boom. Subdivisions like Kartchner Homes, Copper Creek, Hemming Village, and Summerfield have added hundreds of new homes in recent years — and the vast majority of those homes are built with full unfinished basements. For builders, leaving basements unfinished keeps the purchase price competitive for young families and first-time homebuyers. For homeowners, it creates an incredible opportunity to add livable square footage at a fraction of the cost of buying a larger home.
What makes Rexburg unique in the Eastern Idaho basement market is the rental income opportunity. Finishing a basement as a separate apartment unit — with its own entrance, bathroom, bedroom, and kitchenette — can generate $500 to $850 per month in rental income from BYU-Idaho students. That income stream can cover a significant portion of your mortgage and typically pays back the entire finishing cost within 3 to 5 years.
Beyond rentals, Rexburg's young family demographic drives strong demand for practical basement living spaces. With one of the highest birth rates per capita of any city in Idaho, families here need bedrooms, playrooms, and space for kids to spread out. A finished basement is not a luxury in Rexburg — it is how families make their homes work.
Popular Rexburg Neighborhoods & Subdivisions
Where the basement finishing action is in Rexburg
Hemming Village
One of Rexburg's most popular master-planned communities, Hemming Village features newer homes with full unfinished basements. The neighborhood's family-friendly atmosphere and proximity to schools make it a top spot for basement bedrooms and family rooms. Many homeowners here finish their basements within the first year of ownership.
Summerfield
Summerfield is another large subdivision on the south side of Rexburg with a mix of newer single-family homes. Basement finishing is extremely common here, with most projects focusing on adding bedrooms and a shared bathroom to accommodate growing families. The newer infrastructure makes costs predictable and manageable.
Kartchner / Copper Creek
These newer developments on the outskirts of Rexburg represent some of the most recent construction in the area. Homes here come with builder-ready basements — plumbing rough-ins stubbed in, electrical panels sized for the lower level, and HVAC designed for easy extension. Finishing costs are on the lower end of the range because so much prep work is already done.
South Rexburg / Near Campus
Properties within walking distance of BYU-Idaho campus command premium rental rates for basement apartments. Homeowners in this area frequently invest in quality basement apartment conversions with separate entrances, full kitchenettes, and well-appointed bathrooms. The ROI on these conversions is among the best in Eastern Idaho.
Teton View / North Rexburg
The north side of Rexburg offers slightly larger lots and views toward the Teton Range. Homes here tend to attract families wanting more space, and basement projects often include large family rooms, home offices, and storage rooms. The combination of mountain views from the main level and comfortable finished living space below grade is a winning formula.
Rexburg Basement Finishing Costs
Rexburg's costs are competitive with Pocatello and slightly below Idaho Falls, thanks to the volume of new construction and a robust local contractor market.
Basic Finish
$28–$33/sqftOpen family room with framing, drywall, paint, carpet or LVP, and basic lighting. No plumbing. Ideal for playrooms, home gyms, or open recreation areas.
1,000 sqft = $28,000–$33,000
Mid-Range Finish
$34–$40/sqftMultiple rooms including bedrooms with egress windows, a bathroom, upgraded flooring, and better lighting. The most popular choice for Rexburg families adding living space.
1,000 sqft = $34,000–$40,000
Rental Apartment Finish
$36–$45/sqftFull apartment conversion with separate entrance, kitchenette, bedroom, bathroom, and living area. Built to rental-grade durability standards with durable flooring and finishes that hold up to tenant use.
800 sqft = $28,800–$36,000
For complete cost details and material breakdowns, see our full cost guide.
Basement Apartments: Rexburg's Best-Kept Investment Secret
Rexburg is one of the best cities in Idaho for basement apartment conversions. The combination of consistently high student housing demand, relatively affordable finishing costs, and year-round occupancy (thanks to BYU-Idaho's three-track system) makes the numbers work exceptionally well for homeowners.
A typical Rexburg basement apartment includes: one or two bedrooms with egress windows, a full bathroom with shower, a kitchenette with sink, mini fridge, microwave, and counter space, a small living area, and ideally a separate exterior entrance. Total cost for this type of conversion typically runs $28,000 to $40,000 depending on size and finish quality.
With monthly rents of $500 to $850, the math is straightforward. A $35,000 investment generating $700/month in rent pays for itself in about 4 years. After that, the rental income is essentially profit while the finished basement continues to add value to your home. Many Rexburg homeowners report that their basement rental income covers 30-50% of their entire mortgage payment.
Key requirements for Rexburg basement apartments:
- Separate egress that does not pass through the main dwelling
- 1-hour fire-rated separation between units (walls and ceiling)
- Independent smoke and carbon monoxide detectors
- Minimum 7-foot ceiling height in all habitable rooms
- Egress windows in every bedroom
- Off-street parking for each unit
Check our building codes guide and contact the City of Rexburg Planning Department for current zoning regulations before starting your project.
Climate & New Construction Considerations
Rexburg sits at about 4,865 feet elevation and is one of the coldest cities in Idaho. Winter temperatures regularly drop well below zero, and the area receives significant snowfall. This climate makes finished basements extremely valuable — your family will use that below-grade living space for six months or more each year.
Insulation is non-negotiable in Rexburg. As a Climate Zone 6B location, the energy code requires R-15 minimum for basement walls, but local contractors strongly recommend R-19 or higher for comfort and energy savings in Rexburg's extreme cold. Rigid foam against the foundation wall plus fiberglass batts in the framed wall is the standard approach. Read our insulation guide for detailed recommendations.
For flooring, LVP is the dominant choice in Rexburg basements due to its moisture resistance and durability. Carpet is common in bedrooms. In rental units, LVP throughout is the practical choice since it is more durable and easier to clean between tenants. See our flooring guide for all options.
Before starting any basement project in Rexburg, moisture testing is essential. Spring snowmelt can introduce water around foundations, especially in newer developments where landscaping has not fully matured. Our before you start checklist walks you through every pre-project step.
Frequently Asked Questions — Rexburg
Common questions from Rexburg homeowners and investors
How much does it cost to finish a basement in Rexburg?
Basement finishing in Rexburg averages $28 to $45 per square foot. A 1,000 sq ft basement typically costs $28,000 to $45,000 depending on the finish level and room types. Basic finishes with open family rooms and LVP flooring start at the low end, while full build-outs with bathrooms, multiple bedrooms, and rental-grade kitchenettes reach the upper range. Costs in newer subdivisions like Kartchner and Hemming Village tend to be lower because plumbing and electrical rough-ins are already in place.
Are basement apartments allowed in Rexburg?
Basement apartments are common in Rexburg and have become a key part of the city's housing strategy to accommodate BYU-Idaho's student population. However, specific zoning rules apply. You will need to check with the City of Rexburg Planning and Zoning Department to confirm your property's zoning allows accessory dwelling units. Most ADUs require a separate entrance, fire separation between units, code-compliant egress in every bedroom, separate smoke and CO detectors, and adequate parking. A conditional use permit may be required.
How much rental income can a Rexburg basement apartment generate?
A well-finished basement apartment near BYU-Idaho campus can generate $500 to $850 per month in rental income, depending on the number of bedrooms and proximity to campus. Two-bedroom basement units with separate entrances near campus command the highest rents. Many Rexburg homeowners use this rental income to offset their mortgage, making the basement finishing investment pay for itself within 3 to 5 years. Demand is strong year-round since BYU-Idaho operates on a three-track system with students attending all four semesters.
Do I need a permit to finish my basement in Rexburg?
Yes. Madison County and the City of Rexburg require building permits for any basement finishing that involves framing, electrical, plumbing, or HVAC work. You must submit floor plans showing room layouts, egress window locations, and mechanical details. Inspections occur at framing, rough-in, insulation, and final stages. Permit fees in Rexburg are reasonable compared to larger markets, and the inspection process is typically straightforward and efficient.
What makes Rexburg different from other Idaho basement markets?
Rexburg is unique because of BYU-Idaho's massive influence on the housing market. The city has grown from about 17,000 to over 35,000 in roughly 15 years, making it one of Idaho's fastest-growing cities. This rapid growth means there are hundreds of newer homes with unfinished basements. The student housing demand creates a strong financial incentive to finish basements as rental units. Additionally, Rexburg's young family demographic means most basement projects focus on practical living space — bedrooms, family rooms, and functional apartments rather than luxury features.
Explore Other Cities in Eastern Idaho
Ready to Finish Your Basement in Rexburg?
Whether you are building a family room or a rental apartment, get matched with vetted contractors and near-wholesale materials through NewHome Finishers. Serving all of Madison County.
Get Your Free Quote →Working on the outside of your home too? Check out Idaho Sprinkler Systems and Idaho Yard Pros for sprinkler, fencing, and yard guides.