Two years goes by quicker than you think. If you have to move the north door, just put an exterior door in the current kitchen bar area on one side of the window by the patio. Then as others have said, put your dining set in the formal living room, and use den as living room. Anyone who buys your home may have plans to remodel (since other homes are larger), and personally I would see little to no advantage over what you've drawn compared to what's there already since the floorplan looks workable. I think your best bet is in decorating it attractively using furniture that's scaled to the home's size. You'll enjoy using it more yourselves now with a conveniently located dining room and a larger living room. At least move the furniture that you have around and see if that doesn't change your perspective a little.

Well you have asked a tough question to answer based on the info at hand. 1-Is your location legally able to be zoned for having an income suite? You will want to be insured to protect your investment, and this may not be possible if you are breaking the law. 2-How much can you afford to spend in this process? 3-Does your home currently have only 1 full bathroom, or are there 2? Are you on a slab, or do you have a basement or crawlspace. 4-Do you have sufficient electrical at the panel to support 2 households? Will the renter be metered separately? 5-Heating and cooling. Adding to a legal garage will require a separate system. If you abandon the garage function, this may give you more options.

I guess I should have been more specific, real estate and construction in my area (NE Wisconsin) are a lot cheaper than most areas of the US, the median house price is $132.5, so there you go. We like the house, and we're not at all planning to tear it down. It's only my husband and I, with family or friends coming to stay, and I don't really want to hinder our resale value by removing a bedroom. And I wasn't clear, my ideas were 1 OR 2 OR 3, not all three, certainly, as I know we'd never get that done with our budget of $35-40k @Sophie, the house is not remotely a white elephant. The foundation needs a little work, but it's not anything major, as I stated above. We've lived in the house for 2 years, and minor plumbing issues are all that have had to be fixed. And our landlords aren't trying to unload on us. Land here usually runs about $29k for 1/3 acre, and we wouldn't dream of demolishing the house to build new, the neighborhood wouldn't support it. It's an older, more close-knit community, and the house ranges are all over. Further down on my street, there's a house for sale for $60k, and two streets over there's a house for sale for $300k. It's an island and has been built up pretty much since the mid-1900's. The only new house is a Habitat for Humanity house with a tiny little corner lot the original owner has donated (and still lives next door, I think). @Fori Thank you! We see houses with additions being added all the time. It's pretty common around here, particularly with older homes and such. @bcarlson Thank you! I've wondered about maybe changing the floorplan. I thought the extension might make more sense and be simpler in the long run, without really changing too much of the footprint of the house. I want to keep the old charm, and not make it super modern. I'm planning to reuse as much of the existing woodwork and cabinetry as I can. @Klem I do excel at biting off more than I can chew! I don't really want to do a major overhaul, just make things a bit more functional and increase our equity/resale value.

Patricia Colwell - I am seeing nice wood floors throughout. Why are you saying there will need to have all floors redone to match? If you are talking about that little hallway in the background - and assuming that wall in front of that hallway could come down and is not load-bearing, and that is not the front door hallway so the kitchen shouldn't encroach it - I don't see that as a big deal to match flooring for that bit of strip. Other than that, I don't see what you mean. Darlene Thatcher - yes, first you need to post a floor plan for us to help you. Second, you need to tell us a ballpark budget for the kitchen reno. Keep in mind that some exhaust to the outside will need to be installed, but it is not as hard as it sounds if the cooktop is going on--or near--an outside wall. Also, just from eyeballing the pics, it doesn't look like an island will fit in the space, but pics can be deceiving and, as said, we need floor plan and measurements. There are some great kitchen layout gurus on here!