It may not be cheap or easy, but the most permanent, long-lasting way to add real space to a home is a custom-built addition.
The first step is to find out whether zoning regulations and rules in your area allow for additions, says Chris Landis, co-owner of Landis Construction in Washington, D.C. Especially in more densely populated areas, any number of legal issues can arise, including height limits, historic neighborhood restrictions and easements.
If there are no legal obstacles, the next step is making some basic choices about how much square footage you want and can afford. For a frame of reference, Remodeling Magazine's 2011 Cost vs. Value study found the average cost for a midrange family room addition was $85,740, or about $215 per square foot.
Next, start the search for a contractor who will manage the designing, building and finishing for your addition.
Landis says getting competing bids from several contractors is a good idea, but price shouldn't be the only criterion. Ask for references from the builders, and take time to examine the contractor's work and quiz previous customers about their experiences with that builder. Don't be afraid to ask specific questions. Did they finish on time? How close was the estimate to the actual finished cost?