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I'm working on remodeling a basement and the plan for now is to install a subfloor (XPS rigid insulation and plywood on top of that). For the actual floor, I was thinking of using vinyl planks that click together to form a floor.

A contractor I hired to help me suggested that perhaps vinyl is not the best solution for this for the following reason: since some moisture will come up through the concrete floor, the vinyl would function as a vapor barrier and the plywood would soak it up, and rot. He suggested that I put in a wood floor in instead.

Does anyone have any thoughts on this? Is this the correct way to go? What other kinds of materials could I use on the floor to keep things "breathable"?

I don't get water in the basement. I just had drain tiles installed along w/ a sump pump. The basement is only half underground too (4 ft).

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Honestly if you have a contractor talking about basement flooring in a basement were there is a fear of moisture I would fire him on the spot if he mentioned installing real wood floors. Even in a basement with no "water" problems the humidity levels can reek havoc on wood and warp it. I see a bad wood install in a basement a couple times a year. I can't tell you the last time I saw a good wood install in a basement.

XPS and plywood can work in a lot of cases. However most of the time we carpet over this type of install. For real vinyl click lock - the good kind that is thick and pure rubber... we slap this right down on the concrete with no barrier per manufacturers instructions. If you give me a link to the flooring you are getting I can get more specific.

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The other answers hit the nail on the head--wood floors in basements or anywhere subject to moisture is generally a bad idea. I just wanted to add one more vinyl floor variant that you should consider for a basement installation if you are already considering a click-lock floor. I highly recommend loose lay vinyl tile. It is similar to click-lock vinyl flooring but has one key advantage:

You just lay down the planks (no adhesive required)and can lift them up at any point over the life of the floor. Though vinyl is very durable, this feature is very handy should you ever need to replace a tile or two as you don't have to dismantle the whole floor. Also, while both click-lock and loose lay are typically both very moisture resistant or waterproof, if you do have water trouble in the future, you can lift up the planks in the areas where some water has collected to let the floor air dry. Same goes for spilt milk, rather than getting it permanently wedged in the seams and spoiling, you can pick up the planks and clean both the planks and the floor underneath.

To note, a lot of commercial spaces have started to use loose lay vinyl flooring for the same reasons.

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Wood doesn't breathe at any rate I'd consider adequate. If there's moisture present, it's probably going to have problems itself.

I'd put down heavy polyethylene sheeting under your foam. It's probably a good idea regardless of your flooring choice.

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