Hey! great call on starting a home-gym. I did this a while back and I've been adding onto it. The first thing I got myself was a set of weights with an Olympic bar, and a small squat rack. I started doing starting strength and got great gains from this along side paleo. ( I went from 240lbs to 190 pounds!

After that, when I gathered some extra money. I got myself some kettle bells, pull-up bar, and gymnastic rings.

But you can cheaply develop a home gym too. Get some basketballs and fill them with sand to 5-10kg and use them as medicine balls. Make plyo boxes for jumping etc, get some tractor tires and a sledge hammer for flipping and strikes. Make a sandbag. Make a drag sled from an old tire. Get a heavy odd object like a large stone and lift it!

It's pretty interesting what you can do on a budget.

Follow Starting Strength by Mark Rippetoe. All you need to perform that program is a mono rack, bench, barbell, and weight plates.

To be clear, looking good naked is a function of low body fat % with enough lean muscle mass to show. You will have to gain lean mass (muscle). Strength training is the best method to gain dense muscle mass (not bulky like body builders).

Have you been working out for at least 3-6 months? (Any kind, not just gym?)

If the answer to that is "no", then start slowly, and make few purchases.

1. Get a mat (like a yoga mat). There are tons of uses for a mat. The mat may get old and smelly, but they are very useful.
2. Get an adjustable set of dumbbells. DO NOT SPEND A TON OF MONEY. This will probably run $40ish USD.

Some people like elastic straps instead of dumbbells. I like the iron, not the straps.

After 3-6 months, if you've judged that your commitment level is high, then start to add components to your home gym. This may include:

1. A workout bench. These come in many styles.
2. You will also need a bar (normal or Olympic - the olympic bar weighs ~40lbs w/o weights on it, so factor that into your choice).

A good workout bench will have an attachment (optional or not) for lat pulldown type motions. This is very handy if you are overweight but strong - i.e. where doing 2 pullups is hard. A flat bench is useful to have as well, but I would get a bench mostly designed for benching first. Once you can do pullups, a door-frame pull up bar, or even an entire cage, is an option.

After that, the sky's the limit! There is a lot of fun equipment to buy and use, if you so wish.

Again, start slow. I've seen tons of people spend a lot of money all at once, and then stop using the equipment in two weeks. I've had my benches and weights for 5 years now, slowly building up my equipment over two years. I also have a bike trainer, for those sad winter months where biking outside is not an option. Overall, I've spent less on equipment in my lifetime than my coworkers do in about 4 months of their gym memberships (I'm around Boston, and my coworkers go to expensive gyms ;-) )

Good luck!

Check out Craigslist. This is the time of year when people are looking to get rid of prior New Years Resolution purchases (weight benches, bars, dumbbells, etc.) while spring cleaning. I have an awesome set of hex dumbbells and I bought them all on Craigslist piece by piece at a fraction of what they cost in a store. I would also get a couple of kettlebells. These are very versatile and you can do a variety of exercises with them.

Also, pick up a pull up bar that works in a door way. Sure, you may not be able to do a pull up now, but you can get a stool do assisted pull ups, or just lower yourself down. This works the same muscles.

I spent in the neighborhood of what you are looking to spend. Most of it materials...the rest used equipment, except a nice new set of Ader KB's and set of bumper plates (~ $250), which I got a discount on for buying the set. Built plyo-boxes, pull-up bar, 2 sandballs (using old basketballs) and paralettes (~ $100). Bought an Olympic lifting set from Craig's list (~ $100), 2 used stall mats from a used sporting equipment store, 1 piece of plywood for my lifting platform ($100 mats and plywood), and set of rings from Rogue garage sale for a steal! ($7) I have all I need for a great workout - combined with a jump rope, lunges in the driveway, 400m dashes down the street. My point is that you can go very far on a budget if you build what you can and shop for the deals. You might even have stuff sitting around that you can use, like cat litter bins - excellent to fill with water or sand and do farmer walks...or an old fitness step - makes a good weight bench...or old bike - find a used trainer and make it a stationary bike for cardio.

By the way, I would definitely go kettlebells over dumbbells. More diverse. Don't know your abilities, but I can do a lot with one 35 lb. KB or a set or 25 lb. KB's.

TRX. If thats not your thing, I had a Total Trainer from Bayou fitness for years and loved it. I like the TRX much better. I can travel with it.

I go to a 24 hour gym and hate waiting on people to get out of my way...and people who feel compelled to loudly grunt as they lift tiny weights...so I go at odd hours. I'm often the only person in there.

Even cheaper: suggestions on strength training with no equipment:

http://paleohacks.com/questions/92161/strength-training-with-no-equipment#axzz1rfdOn8GQ

The choices are endless! Since your goal i aesthetic in nature, I would suggest training like natural bodybuilders, without drugs you don't need to worry about gaining to much muscle mass. Personally I think that you should focus on training and training in accordance with your goal. Adjustable dumbbells, Bodyelastic type cords, TXR like stuff are all within your budget limit, and suitable for aesthetic training. Bodyweight exercises can be performed with little or no equipment, and can be performed to match any fitness level. Good luck with the project!