First, you'll need to conceptualize your recording studio and decide how much money you're willing to invest. Believe it or not, a basic home recording studio can be scrapped together for under $1000, especially if you already own a relatively new computer and are willing to purchase used equipment. If you want higher quality equipment and a more comfortable recording atmosphere, your budget can quickly skyrocket.
A computer is what you'll ultimately be using to record and sequence tracks. Macintosh computers are more popular than PCs for recording purposes. Newer, faster computers will allow for faster mixing, editing and effects rendering. In addition to computer hardware, you'll need some sort of recording and sequencing software, such as ProTools, Digital Performer or Cubase.
Microphones will largely dictate the sound quality of your recordings. High quality vocal and instrument microphones can cost thousands of dollars. The truth, however, is that it's possible to achieve 90 percent of the sound quality of these mics for a fraction of the price. Take a look at some of the offerings from brands like Shure, such as its popular SM57 and SM58 microphones. These mics are versatile, have excellent sound quality and are available for around $100 each.
Basically, you'll need some sort of recording interface placed in your signal route between the microphones and your computer. This could range from a Digidesign MBox 2, costing only $200 and only offering a few microphone inputs, to a 40-plus channel mixing board, costing between $5000 and (literally) millions of dollars. Mixing desks from Mackie are considered to be an excellent value for the home recording enthusiast. A good mixing desk will be transparent, allowing the natural sounds of the microphones to reach your computer's recording software.
When accessorizing your recording studio, the sky is the limit. Many recording studios include a piano that never leaves the room. This is a great way for musicians to hammer out ideas during a recording session. Various hardware effects processors, providing reverb, equalization or auto-tune could be future upgrades to your studio. Sonic wall dressings will perfect the room sound of your recording studio.