Hi Three Daisies We completed a project much like you describe about one year ago. The job involved cutting through the concrete floor to hook into sewer lines and moving both the hot water heater and the sewer pipe from the powder room on the main floor. We purchased a toilet and small vanity from Home Depot and our plumber (who did ALL of the work) got us an inexpensive shower stall. Our total bill was just short of $6000. This is not a fancy bathroom, the pipes are exposed and it is in a room that also holds my laundry area. There IS a door that locks! It ranks as one of the best things we have done. There is a bedroom and living area on the same level. When the kids/grandkids stay with us this is where they "live." When our son comes home and brings friends along they all stay downstairs. I cannot tell you how wonderful it is to have the other bathroom to ourselves while everyone else uses the new area downstairs. Could we have lived with having guests use the only other full bath? Yes, we did it for years. But this is a million times better. They have privacy and so do we. And we feel that it has improved the value of our home, even though it is "rustic." I would think about getting a couple of other estimates and look at where you might save a bit of money. Perhaps you could shave off a thousand or two and that would make it seem more realistic for you. I know that we would not have done it if it would have been $10,000. But for 6,000 we were willing to bite the bullet. Good luck with your decision, it is always hard to pull the trigger on major expenditures .

Ok, so here is a bit of reality for those of you who responded about using my Social Security for the "extra" income I need. I "qualify" for full SS since I am 65, but they have denied my benefits because of ----my income. That's right. You see, if you work all your life, put yourself through undergrad all on your own for 15 years, then go to grad school for 6 years while adopting a baby at age 37, followed by working for a few incompetent and/or unethical bosses, move on to starting your own agency, and eventually becoming a little bit successful at what you do -- you are PENALIZED for it when you NEED some of that money back you've paid to SS all those years. Yes, I "make" a good income, but what I actually take home to pay my bills is not always enough, despite living a pretty frugal life. Therefore, like I said when I posted this question, I will always have to work, and am simply looking for the simplest/best/easiest way to stay in my own home by turning some of the space into income. I feel like I deserve this. I am leaning toward buying a free standing kitchenette (by Acme or Summit, which are very popular in NYC/Hong Kong where space is a real premium). This would require simply putting a lock on a common door, adding some minor electrical and plumbing, and living in half of my home while renting the other half to a medical/grad student. Are there foreseeable problems? Perhaps! But moving out of my home is not an option. And this could pay for half of my mortgage, making that payment below what I would have to pay for a smaller rental house in an undesirable neighborhood if I did move. Not exactly feeling the love from some of you posters, but to those of you who offered encouragement, I thank you.

@cpartist: Thanks for the image. We've previously discussed doing something similar but with an attached bathroom to effectively create a garage apartment. Unfortunately, the windows shown on the back wall are actually only skylights. If we close off the double-mulled window at the left side of the existing playroom to create a bedroom, that leaves 1 skylight for the playroom and hallway. Even with adding another skylight the areas will be dark. Also not sure about creating that bedroom without direct access to a bathroom, which forces guest/children to walk through a playroom to utilize it. The more we look at this and consider everyone's comments, the more we think our hallway plan above addresses the most needs for our family. If we, or some future buyer, needs a downstairs en-suite then that could be added without difficulty. Thoughts?

If you mean configuring the laundry and powder room into the utility room space, then a remodeling contractor should be able to help you with placement/code or maybe other ideas. I think, in an ideal world, we could all have all the space we need for all the elements in a house we want. But I'd rather have a powder/laundry combo, if I've determined that I need another 1/2 bath, rather than make do with one less bath than my family needs because some people object to having a W/D in proximity to a toilet, or whatever it is they object to. If you can squeeze enough space, I like the kinds of doors that pull out and tuck into the sides of the WD to hide it if you feel the need. I had both of these pics saved when I was trying to figure out how to move my w/d from a too small for today's large W/D units laundry room to my main floor bath. The first one is a bit hard to see but the doors slide/tuck in beside the machines.