I constantly preach about making the most of the space you already have before adding on, or moving on to another home.
Here is a great example of my favorite sermon.
A family featured in Sunset Magazine went from this garage:
And created this design maximizing their underused space by adding a gabled roof to create a loft space, and adding a bedroom office/play space and a bathroom to make a complete guest area:
The 400-square-foot final product:
In a time where the name of the game is not only waste less, but also spend less, this project epitomizes "smart remodeling." Money is saved by using an existing space instead of creating a brand new addition, and of course fewer materials have to be used to create the space. More green for your wallet and the planet.