Thanks for the input! The bathroom won't be a master bath -- it's just a second bath that will be used both by us and guests, as we only have one bathroom now. Our tastes are on the simple side, as in we like old-fashioned bathrooms, and will choose good quality but not fancy fixtures, and a tiled shower maybe 3 X 4 or so...? No kids. Single vanity. We plan to put in a skylight as there are no windows. I think the easiest wall for plumbing will be one of the short walls. The design nycbluedevil described was more or less what we were thinking of so far -- shower on one short wall closest to the door wall (i.e. on the high side), and sink and toilet on the low long wall. I was thinking there might be some nice way to build shelves or something into the remainder of the low wall, but frankly I am lousy at interior design and would rather be in the garden! So thanks again for your input.

thanks to all who have posted so far, especially Eric. We can probably save/budget down the road for a kitchen redo, or do part of it ourselves. Additions would be a little harder for us except finish work (floors, tile, etc. Can do drywall even but would need to find time to do it). What that kitchen has is a U shaped layout, not too bad except there are overhanging cabinets between a small dining/family space and the kitchen. It's a counter/pass through kind of setup where someone can sit at stools and talk with the person in the kitchen....except the cabinets hang down so the person in the kitchen has to look under them. We would likely tear those out and relocate the stovetop to the perimeter wall and make that pass through an island. Then that entire space could become kitchen/dining. It is possible we could still move out a wall on that (kitchen) side of the house down the road too, we are in Hawaii so all the construction costs are much, much higher than mainland. So jealous of all the posters here who can put on a large extension for less than 50K. Plan A or Plan B will cost us about the same. We don't plan to sell and move anytime soon, but should we need to we're leaning toward sq. footage instead of just extending current bath and upgrading the kitchen. Our neighborhood is about 20 years old so people are beginning to redo those rooms as the fixtures and appliances are ageing. We redid all the appliances about three years ago with stainless finishes, new faucet/sink, and redid the countertop Corian, so the kitchen is livable - just need to clear out some clutter and make smarter usage on available storage space. We could paint or restain the cabinet doors to freshen it up. A few neighbors are creating the "big bang" kitchen now but I'm not certain a 70K upgrade will improve the value that much as a new neighborhood is planned about 5 miles away within the next couple of years. Would we love to live in a "WOW" kitchen, of course. But as with most people we have to make a decision on where it is best to spend the money for now. We could feasibly also add on a 2nd story in future years, but we prefer the single story and if we age-in-place as planned, the new bath will include wide accesses and no-curb shower.

are there bedrooms down there as well? if someone will be using the bedroom in the basement, then they will want a decent bathroom to go with it. 6 inches really isn't worth the hassle of taking down or moving a wall. A foot, maybe, 6" ? no. once you put on the wall or tile, you've got maybe 4" total. Maximize the space by choosing a good vanity w/storage, and possibly building a niche into the wall for additional storage. (use the area between the studs as a built in cabinet) using a prefab shower is fine, but pick a decent one as opposed to those flimsy acrylic pieces. you don't say want the resale value is, so i have no way of knowing how much you should invest. You say you bought mid-range, but I don't know what else you need to redo. anything under a 15% profit really isn't worth it. as for fitting it over the existing drains, usually you will need the new drain cover. if the drain needs to come up, there are extensions. I would advise your husband to do some research on how to fit those into an existing bathroom. If he's handy and can build his own slope, mortar bed and waterproof the shower, then he could prob tile it himself. Just depends on how much work you want to do and what the return is on what you choose. by the looks of what you have there currently, you may have some water damage underneath all the mess. Tear out what you can and then determine what you need to do.

As a real estate appraiser I would advise to try to keep it. It will reduce the valuation by a few percent. If I were to appraise your home, I would now have to compare and adjust it from a 3 bathroom home to a 2.5. That's anywhere from $2,500 to $5,000 adjustment downwards. Understand that I don't know where you live or your real estate market. Even though there is no bedroom on the floor, it's a very usable space. At the very least, I'd put in a shower. You just never know when someone will lose their mobility. It looks like an older home. If your laundry room is in the basement, you may want to reconfigure it to bring the laundry up to the main living area. That would be an improvement in utility and the only reason why I would consider eliminating it. Hard to see everything, but you could reconfigure the doorway/entry and take over that vestibule area.