I think your ideas sound great. I would definitely keep the insulation on the walls and cover it somehow: drywall, beadboard, etc. If it's dark, add a big mirror or two and lots of light. You can find fun lights at places like Target.

Get a thick rug and maybe some padding for underneath it, to keep the floor comfortable and not too cold. Bean bag chairs and other comfy, non-fussy furniture is great.

And if you keep a small refrigerator down there filled with sodas and snacks, they'll love it.

Don't forget to keep your kids involved with the choices and with the work. Then they'll really feel like it's their space.

Although it's a pain, chalkboard paint can transform a wall. Just don't freak out at what they scribble.

We did an expensive remodel of our basement. But many of the essentials can be cheaply obtained:

-Comfortable seating and side tables (we have 2 large futons)
-TV (our son's PlayStation is down there)
-Small refrigerator (and permission to eat in basement)--food is a huge draw

Temperature is important; we have a gas fireplace that makes it very cozy in cold weather, and carpeting. Alternatively, use thick rugs or carpet remnants, and you can use space heaters if necessary (and if you are confident they won't get knocked over).

We also have a magnetic wall and the kids use it to put up "poems" (of dubious distinction) with those magnetic word kits. We do have framed artwork on the other walls.

In our basement bathroom, there are some exposed PVC pipes. We sprayed them a fun color (periwinkle) using paint especially made for plastic. They look terrific and turned a rather ugly element into one that is a focal point that looks intentional and attractive.

Our house is Teen Central. On any given weekend evening, there are about 8 boys down there. We did add lots (and lots) of extra soundproofing when we did our remodel--that's a big plus. The kids love having a space that feels like their own.

Good lighting is important in our basement so it doesn't feel dungeon-ish. I have a bunch of floor lamps and table lamps.

And even though everyone thinks they hate fluorescent lights, I love them in the basement. It's a small basement and I have 2 of the 4-ft long ceiling lights with 4 bulbs each. Here's the deal though.....you have to use COOL white bulbs, not warm. Cool white light is nice and bright and has none of the greenish or yellow cast.

Bright Colored Furniture:

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[modern family room design[(https://www.houzz.com/photos/modern-family-room-ideas-phbr1-bp~t_720~s_2105)

Cubby Shelves and TV (mimic look with cheap furniture)

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[modern family room design[(https://www.houzz.com/photos/modern-family-room-ideas-phbr1-bp~t_720~s_2105)

Bar Area for Eating (Include popcorn popper, snow cone maker, etc...)

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[traditional wine cellar design[(https://www.houzz.com/photos/traditional-wine-cellar-ideas-phbr1-bp~t_755~s_2107) by other metros general contractor BLACK BULL Group

Cozy Second Hand Furniture

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[eclectic home design[(https://www.houzz.com/photos/eclectic-home-design-ideas-phbr1-bp~s_2104) by other metros general contractor Total Basement Finishing

Work Out Area

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[eclectic home design[(https://www.houzz.com/photos/eclectic-home-design-ideas-phbr1-bp~s_2104) by other metros general contractor Total Basement Finishing

Game Area
div>[

[eclectic home design[(https://www.houzz.com/photos/eclectic-home-design-ideas-phbr1-bp~s_2104) by other metros general contractor Total Basement Finishing

I agree with letting the kids help make the choices AND doing some of the actual work. Nothing like investing apart of yourself in a project to help keep it it clean.

Second hand furniture can be your best friend in a kids space. I'd go one further with a small fridge. A inexpensive microwave for popping popcorn and heating up snacks.

Our basement room is not huge, it's actually tiny. It's not fancy, it's not elaborate like some of these pictures, but it does contain lots of kids. My husband, FIL and I finished off the space a few years back so our 3 kids could have their own space to hang out with friends. Our room is about 13 x 22 with 3 foot deep closets that run 13 feet along the far wall for storage. We have an air hockey, rod hockey, darts and pinball machine on one side of the room. The main part of the room has a cubby extension that holds my treadmill and small flat screen tv, then there is a set of slouch chairs, a bean bag chair, 2 high legged chairs with a small table to play board games on. That part of the room has stereo surround sound so x-box games can be blasted! We have another larger flat screen tv with a small cabinet that holds stereo equipment, and video game units.

We put wood panelling along the bottom which I painted in Cabinet Coat, thicker paint that holds up well to kids. We did a slight drop ceiling in order to put panels in that contain sound proofing. For the floor, we used carpet tiles. The upper portion of the walls are sponged in shades of darker blues since my husband is a Toronto Maple Leaf fan, but the walls look like fresh Levi Jeans.

We did run heat into the room, but only keep the vent slightly open down there. We painted the floors with a waterproofing before laying the carpet tiles which have their own pad built in. The great thing about the carpet tiles is someone spills, you pull up the offensive tiles, wash them, dry them and reinstall them.

We have tons of lighting down there, the main switch controls one light off in the table section and the 4 cans in the main area. The second switch controls the 4 cans for the gaming table area. A third switch inside the closet doors contains lighting for the shelving units. All run CFL floods except the storage area.

I installed sliding closet doors along the back wall that are also painted with cabinet coat (as is all the trim) and then put heavy duty shelving units back there. We store all our ski equipment, school supply 'store' that I have, board games, videos, etc. on the shelves there. Tons of storage I am so glad I insisted on. Could have had a few more square feet, but I am happy with having the 'stuff' behind closed doors. We had planned on a fridge, but didn't, don't miss it. There is a large food pantry where I store all excess food things just outside the door. I keep it well stocked with juice, water, gatorade and snacks and everyone is happy. A well placed, easily accesible trash can is far more important than a fridge, in my experience.

We didn't skimp on insulating the area, so it's comfortable year round. I designed most of the space, my husband came up with the cool cubby that has my treamill, we did the whole thing ourselves and spent way on the lower side of 5ooo - 7500 including all permits. 50K basements room = nicer homes than mine, but the kids love our room.

The key to having one's home become THE teen hangout isn't fancy furniture...or gorgeous spaces...it's a high tolerance for noise, smelly feet, and a well-stocked deli drawer. And good condiments and bread. If you feed them, they will come.

I have two sons...they are now 22 and 25...and when they visit their buddies STILL like to hang at my house. If you can pick up some "crate" furniture cheap it is nigh on indestructible.

Whatever you do, DON'T put in a pool table! After the initial novelty wears off, no one uses it and it takes up much of the room. If you really want one, buy secondhand. In fact, just looking at all the used pool tables for sale might convince you that they turn into white elephants within a year or so.

Better uses for that money: air hockey, wii, xbox, and a big screen tv for movies if your kids are tweens or older. If your kids like art projects keep all the materials there in one place, well organized and accessible. Agree also with those who said it is the tolerant attitude of the parents and family that makes a teen hangout welcoming rather than the money spent on a room. AND plenty of food! We ordered pizza every Friday night and brought out the skateboard ramps for our driveway, and were rewarded with between 8 and 20 boys every week :)