I assume you're renting because you said that painting the wood paneling used to be a "nonstarter" but is now acceptable...so that brings me to a very important question. Why hasn't your landlord fixed the fireplace? If you don't have any heating in your apartment and rely on a heater (isn't that dangerous?), the landlord should pay for it to be fixed.

My first piece of advice? FIX THE FIREPLACE. Yes, ceiling is sad-looking, and the mural is really tacky, and the wood paneling was terrible... but those are all cosmetic changes. I understand they all seem daunting and awful, but the larger picture is that you live in an apartment with no heat and this is enough of a concern that it should be your top priority. Have you received multiple quotes? One person may say $6,000, another may say $4,000. How much is it to replace the fireplace instead?

Paint doesn't cost a lot of money, you can demolish the wood paneling yourself, and you don't plan on replacing the flooring yet - so you should be diverting your funds to making your home livable on the most basic level - and that means making sure you don't freeze to death in the winter.

I'm confused, is this a basement apartment within a house that you own, or are you renting this space? If you are renting, I would think the landlord would be responsible for things like redoing the floor and rewiring electrical outlets. Please clarify!

I'm reading this as the OP is the owner (on a tight budget) & not the renter, as it'd be the landlord's responsibility to take the carpet out and painting etc. I'm not quite getting that you can't provide furnace heat for your tenants other than a small space heater and I doubt a fireplace would be a safe heating option.

PAINT IT WHITE! It's a basement, and I understand light is a luxury.

You can then tone it down/colour it with your furniture, curtains, etc.

Paint it white, or paint it cream, as much as you can. Even if you have to leave some of the paneling, it will still be much lighter. Then see how it looks and post it on AT again.

Definitely look into other fireplace options - for example, could a flu-less fireplace be inserted in the gap? They're not particularly energy efficient but then neither is an electric heater. This is the type of think I mean:
http://www.gelfireplaces.com/

Painting the stone fireplace, woodwork and walls in pale, neutral colours would make the room larger and would be a very cheap way to make the space feel lighter and brighter. If you are overwhelmed then taking it back to neutral gives you flexibility to try different looks with cushions, curtains, pictures etc.

Installing mirrors (over the fire place and/or on the back wall) to reflect natural light would help lighten the room too.

Have a think about layout and how you use the room - at the moment everything is pushed back against the wall and you have a large TV covering the one source of natural light (although this might be because you had to rip up the carpet and have moved the furniture around). If the room is used as a living room and study, think about how you could divide the space. For inspiration look at how some of the Small Cool entrants divide up their spaces. If it was me I would have the couch opposite the fireplace, with the desk behind it like this:
http://www.apartmenttherapy.com/making-space-desks-behind-the-113137

Best of luck!

check out Income Property on HGTV Canada. He renovates old basement apartments into gorgeous rentable units. Loads of tips.

Paint the whole thing, ceiling included in shades of white and off-white getting. Just see how that looks before doing anything else. Also, it's quite possible to paint panelling, and it can look nice in a sort of cottagey way. I don't know what your hesitation was.

I would look into wood-look vinyl flooring - you can get it for as little as a couple dollars a square foot. It's ideal for basements with flooding risks. It comes in strips, actually looks good and would be warmer and softer underfoot than painted concrete. And you can install it yourself, probably in less time than the paint treatment you mention.

I don't understand how you can rent an unheated space - is it even legal? Whether you are the renters or owners, I would check into that.

However, if you don't want to fix the fireplace, at least get a heater that fits into it, or fits on the wall inconspicuously. Would a gas insert be possible to provide heat and provide the look of a fireplace?

what about the kitchen ? I imagine a flood could destroy the major appliances. might be a good time to change the layout of the kitchen if you want.

White and splashes of color.

It sounds like you are the owner. It also sounds like you are over-thinking things a bit. Renters don't expect basement apartments to be perfect. That's why they are usually cheaper than ground floor and upper-level units. That big, beautiful window hidden behind the TV in your space really saves it, and it's going to appeal to someone who has been looking at dank dungeon units all day. So first thing's first, move that TV!

I agree that the next best option is to paint. Creme/tan colors on the walls (yes it's a little boring, but it will let the light in much better than anything else) and a matte white on the ceiling, It looks like a lot of that tacky "shine" you are getting is coming from a gloss paint on the ceiling.

I also agree with some of the other comments about putting in a cheap floor verses painting concrete. That paint will not hold up from tenant to tenant and you will have to re-paint every time someone moves in and out. It will also make the place much colder in the winter.

Laws about providing heaters verses having a heating system vary from state to state and possibly from region to region (def illegal in my native northern Ohio). Look up to see what the policy is where you live (this costs nothing) to make sure you are covering yourself in case of emergency. The fireplace is by no means a deal breaker. I have lived plenty of places with non-working fire places, and if anything I considered that it was an architectural feature that many of my neighbors did not have. Also, depending on your region the mural might be back in style with younger tenants, and it could save you a lot of time in having to paint it.

Lastly, while in most places you are not legally obligated to tell your new tenants about past flooding, I would strongly recommend that you encourage your future tenants to get good renters' insurance that covers flooding. Again while you are not legally obligated to do this, the last thing you want is another flood, the tenants feeling that you should pay (which legally you should not) and walking out on you or trashing the place as a result. Also it's good karma for you. My parents always encouraged me too have good renters' insurance, but many people are clueless about it.

Does this basement flood often? I recommend installing a drain tile if you really want someone to live here.

Paint the space white and get that TV out of the way of what looks like a nice window.

I lived in a garden apartment for a year, the 2 most important things I did to make the space feel more bigger was:
1. paint the wall a light, bright color
2. add lamps and a hanging light in addition to having the track lighting.

Here's a picture of my old living room and bedroom.
http://tinypic.com/view.php?pic=huospe&s=6
http://tinypic.com/r/w2iqon/6

As for the fire place try to put some tall lighter colored statues/vases with flowers on the mantle or a nice piece of art, even if you can't get rid of it, it'll try attention away from the heater.

Move the TV, it blocks all of your light.
Paint as many surfaces as possible white. Then introduce a bright bold accent color (I'd suggest teal or apple green). I would stay away from beige.
Declutter, you have a lot of random pieces of furniture that don't match, including some empty bookshelves. Get closed storage instead of open bookshelves.
Get a slipcover for that couch.
Replace those wall hangings with one that is big enough to cover the whole wall behind the desks - and pick one in brighter colors.
If you paint the floors, buy a big area rug to soften it a little bit.
Limit the number of patterns. All those different wall coverings make the room look smaller.
Can you streamline that work area a little bit? E.g. share a desk? I would also replace the desk chairs with something that looks nicer. I had a chair like that in my living room for years, it always made the room feel like an office.
Use lamps instead of overhead lighting.
Check IKEA for cheap accessories, lamps, fabrics, and rugs (if you have one nearby), craigslist and garage sales are also your friend, just try to stay within one theme.
Good luck!

Why is the heater out in the middle of summer? It takes up a lot of space and, if you do decide to go another winter with it, you should at least keep it in storage until it's needed. I would paint everything a light color, as others have suggested, and that includes the ceiling. Why can't you paint the paneling?

Your basement kind of reminds me of this room, with a great before & after: http://www.younghouselove.com/2011/06/paneling-the-bane-of-our-existence/

Oh, where to start. This whole space needs light and warmth and neutral. Since you have such a mix of materials (stone, paneling, concrete, wood trim, beams) they all need to be painted the same basic color tone, a little lighter on the ceiling, and darker on the floor. Keep the trim very close to the wall color (one tone darker on the same paint strip).

Do not paint the floor dark/slate. I think you should look into concrete stain/etching in medium warm gray tones (match to Granite-benj moore). I do think a single paint color on concrete basement floors can feel very basement-y, so staining instead will give it more of a natural stone appearance and actually look better, even though the concrete is more visible.

The walls need to be light gray - Oyster Shell (Benjamin Moore). The ceiling needs to be the lightest tone of warm gray - maybe Dove Wing (Benjamin Moore).

Paint the paneling as well. It has to be painted. And the trim - Oyster Gray for all.

For the fireplace, I think you could cover it up completely by building a drywall 'box' that frames out over all that stone, floor to ceiling. Build this box so that the TV can be mounted on the box over the fireplace (either mount the tv into the new drywall box, or mount a narrow shelf onto the frame that can hold the tv). While you have the tools out, build floor to ceiling shelves where your computer desk is.

Consider spray painting all the track light system 1-2 tones darker than the ceiling so that they don't stand. And finally, get some sort of trunk or storage ottoman so you can store some of the random stuff that seems to hang out down in this space. Good luck, it is going to be a lot of work, but the windows and the size of the space make me think that the effort would be worth it.

Agree with all the suggestions here, especially the suggestion to paint the ceiling white (the whole "sky" thing is fooling nobody I'm afraid).

Also agree about not painting the concrete floor, if only because you will be left with undoubtedly basementy acoustics. Laminate flooring is a good suggestion, but also consider lino - you can get very good quality nowadays for very good value. I have herringbone parquet lino that people are astonished is not real wood and it is much softer acoustically than wood (as well as vastly cheaper).

One thing I would add is - if possible point the spotlights UP at the ceiling, where they will bounce back down with a softer, diffused light, rather than the current downward angle, which just makes the ceiling feel lower.

This basement just looks too busy. If you are painting the floor slate grey, leave it as that, dun add the lace pattern. Paint any wall you can, white. Even the fireplace, it looks Flintstoney and in a bad way. And that hideous black and white curtain?! Is there a window behind it?! Have it in plain white, cream or cool grey (but lighter than the slate grey).

Wait 'til you see what a flood will do to that painted concrete floor! Why not use carpet tiles which you can take up and/or rewash if there is a flood and you can install them yourself. They will add warmth and coziness in the winter. Flor brand tiles can be expensive so maybe even part of the basement would be better than nothing but box stores have carpet tiles too. Almost all panelling is ugly and/or dated and it would vastly improve the atmosphere to paint everything a warm white or whites. If you can't paint get a large map to cover most of it. Target has nice slipcovers for that couch if its style will permit one. If you are a renter the map and carpet tiles can be taken with you to a new location.

If you have a teeny tiny budget, spend it on an electrician. Take down the cove molding and the stupid track lights. Have an electrician install recessed lighting and sconces if possible and more outlets for lamps.
Then either dry wall over the paneling or paint it. I don't know why painting it is not an option. Take some inspiration from Sarah's Summer House. All of that little cabin had wood on the walls and she painted ever inch of it. Sure, you're stuff isn't real but it still needs lightening. Pick a nice white in an eggshell finish to bounce the light and paint the sucker.
Install vinyl plank flooring on the floor. It's inexpensive and better in a basement than a carpet, which might only get damp and moldy. Ewwww, I can't stand carpeting in a basement. It makes me feel oogie. Put some area rugs on top of the flooring if you must have softness. Try Flor carpet squares or something not too precious from Ikea.
The fireplace is unfortunate. I think Genevieve Gorder fixed a similar problem for some clients on her HGTV show in the first season. (Two women living in a similar kind of space. Go look it up).
You are very lucky that you have big windows. My basement has a teeny tiny window in the utility space. But even with my lack of natural light, my basement is much brighter and cheerier. It was the electrician who did the trick. Nevertheless, that window is a nice focal point. I'd try to find a way to play it up.

I vote for white walls and ceilings with a dark grey floor. I would leave the wood beams and stone fireplace as-is at first. You can always pull the paint tools back out if you don't like them against the white walls-- that would be a lot easier than painting it ALL and then deciding you didn't like it....
The window is a great asset, and I love your couch! Good luck!

This conversation is an exercise in futility. The OP needs to clarify whether she is an owner or a renter before suggestions can be made.

I'd paint the paneling or remove it and replace it with drywall. I'd put down wood laminate flooring - at $1/sq ft it's probably the best improvement that could be made to any basement apartment because it makes it feel much more finished. Concrete floors are just horrible to walk on, and they'll look terrible, especially after some time. You'll certainly regret painting that floor.

If you're going to have to leave up some of the paneling, paint every other wall white. Don't mess with color since it will just clash with the wood. If you can paint the paneling white, you can pick some colors for the wall, but nothing too extreme. Don't believe people who say that you should only use light colors though - white generally makes things seem more cramped, the right color will give the room more depth.

As for the fireplace I think your biggest mistake is putting the heater in front of it. Move the heater somewhere else, and you can make the fireplace a "feature" instead of something you're trying to hide behind a heater. If you want to make it look better you could build a surround over it so it could take some paint, for instance. If the rock isn't real (which I suspect it's not) you could take it off and see what's underneath, and cover it back up with a nice broad tile of some neutral color (slate for instance). You could probably do that for $3-$4/sqft, maybe less.

You basically say you hate the fireplace and as it is, I would too. Make this weakness in the room your strength. Put the heater somewhere else, because it adds more uglyness to the uselessness. Put big candles into the fireplace, even if you don light them. Put effort in decorating this wall (with bright colors, I agree with the former posts). Also: Use bright fabrics like pillow cases, blanket, maybe a rug to add some coziness. Stay with one colour or colour group since you already have different styles and colours in furniture. Use more lamps. Put them everywhere you can possibly place them and if you can find, use upwards-pointing models, maybe with reflecting lampshades to add more sparkle. It will make the room look less dark and closed-up. And, a personal advice: Your home is what you make it. Have fun finding JUST the stuff you want for it and enjoy the process. Take an example of all the people here: They love rearranging, remodeling, redoing things and post the results. Take up their spirit and love what you do!

Yes the basement look dated and 70's,but when they built this place they must have certain look they want to create here, with the panel wall and the whole mural and a sky to match and the big fire place. If i were you i would embrace all the features instead of covering them with clothes and shower curtain. Those things hanging on your wall just make place look like a 1860's civil war patient ward where they hang clothes as a partition.

Okay, first off, the place is a mess. Tidy it up and it will seem bigger. Get rid of any pieces of furniture that you aren't using.

Paint all of the walls and the ceiling white. Move the tv so that it is not blocking light from the window.

I love the fireplace as it us. Sure, I think you might be able to improve the look of it, but I think it's the least of your worries design wise.

The tapestries on the wall make the place look more crowded.

If you paint the floors, I think a coffee table and an area rug will really help anchor the room.

Remove all of the clutter around the door, which instantly make a place look and feel uninviting and smaller.

This is weird. Amanda had to put up that revolting shower curtain to cover an even more revolting mountain print rather than just painting over it... suggesting a rental. But she wants to do silly paint effect things with the floor... suggesting ownership. I'm baffled.

Whatever the case is, short of a complete gut, the best solution would be to paint the ceiling white and also the de-paneled walls, leaving just the fireplace and the wooden beam that supports the lights. Carpet with sisal to add neutrality and to complement the stone and wood (which would be too difficult to remove) - the room has character enough without gimmicky paint effects, and concrete floors are very uncomfortable. Move the TV unit in front of the fireplace and swing the couch around to face it - this will create more separate zones for living and office. Throw out all of the useless cheap bits of crap like the pinebookcase and the clock over the fireplace and go minimalist for a while.

Like many other commenters suggested, definitely start with decluttering, including the walls. No matter how bad that mural is, the shower curtain is worse. Likewise with the dark paneling and the random tapestries. Even if all you were able to do was paint out the ceiling and paint over the mural, bringing the furniture and the clutter down to a minimum will make this room feel less like a cave.

All of the mismatched and empty shelving is not doing the space any favors. I would remove all the freestanding units and instead install a few floating shelves above the desks running almost the length of the wall.

Please remove the clock from the fireplace. It is definitely adding to the bad part of the seventies vibe.

I think you should reconsider adding a pattern to the floor. It isn't a large space, and you're already going to have the texture of the paneling (painted or not). Textured walls, patterned floors, the seventies fireplace, and that ceiling all together will be mighty chaotic.

I am actually sort of a fan of the ceiling, and the way it is trimmed out with wood running all the way around. The track lighting, however, makes it difficult to appreciate. Remove all of those fixtures mounted on that moulding. Instead use a few table lamps, or perhaps a standing lamp for light. That should make it feel more cozy and less like some industrial basement office.

I agree with other comments that the TV should be moved. Consider just switching the television and the couch, leaving a few inches behind the couch in front of the window for simple, plain, floor to ceiling curtains. The ones with the pocket for the curtain rod, not the grommets or tabs. Simple, simple, simple.

A large area rug, a coffee table (or coffee table sized ottoman), and some efficient office storage (keeping your desk as clear as possible) would be a

A diamond in the rough. I'm jumping on the Blandwagon vision and adding a [url="http://www.apartmenttherapy.com/red-barn-renovation-why-i-boug-105085"]Woodstove[/url] (may be cheaper and definately heats better). I kind of like the floors. I'd like to see the window freed up too -- mirror opposite, couch facing fireplace, desk placed behind couch.

I just refinished a dark basement apartment. Here's my before/after http://cl.ly/image/2Q1t2P3b392W

Absolutely paint it white. Paint the floors high gloss white with decking paint. It will take 3-4 coats but it's easy. Get a nice large sisal rug (they're cheap). Paint the walls white and decorate with neutrals, and some splashes of color.

Make sure there is nothing in front of that big bright window. Add a large framed mirror on the opposite wall. Mount the TV on the wall opposite the fireplace, over the desk.

If you can get the chimmney repaired and get an insert pellet or wood stove that sits flush with the mantel, that would be totally awesome and highly economical.

Paint the floor one solid neutral color and use area rugs to add color and texture.