I think you first need to look at your general area and the size and style of homes there. Attend open homes and check what others have done or not done and the price they sell for. Even look at returns on leasing according to the style and condition of the house - Estate Agents will happily help you with this. Depending on movement in the market around you, this can take time, so be patient it will be worth it in the long run. You can be a little adventurous with any upgrades when people are upgrading and renovating all the time, just don't to too far with what you do or how you do it to avoid overcapitalising or limiting your market. I'm also finding a lot of buyers are resisting ultra modern homes, they like modern but not too OTT so beware of adding features that may not appeal to everyone. Again, studying the type of people in your area will give you clues as to the type of people who will want to buy into the area, the type of lifestyle they have and what they want in a home. The trend to putting ceramic tiles in kitchens and casual living areas is fading and they are much more expensive to take out and replace. Definitely not a good idea if you decide to lease as they can be broken or even pit if not cared for properly. I'm presently looking to buy a new home and I'm seeing too many homes where tiles have been destroyed which is going to be a very expensive exercise to replace. If you are going to lease, keep things simple. I think Oklouise has nailed a very simple plan although I would take the toilet from the laundry, some space from both the kitchen and living area and put a separate powder room beside the laundry so you can make it more attractive for guests. One slide-in door from the hall opening to a lobby with the laundry going off one side and the power room the other, would take care of any odours or noise. The washing machine and dryer will make noise too. I don't think I would attempt to create a master suite downstairs, I know many who agree with me on this, but dividing bedrooms over two levels tends to create "fractured" families. You certainly won't want to be running up and down stairs all night to a restless or sick toddler. It then becomes too easy to have the toddler in your room and that can be a very hard habit to break. Three bedrooms are sufficient for many people so a simple upgrading of the bathroom, wardrobes (if necessary), flooring and window covers should be all that is necessary for the upstairs. The emphasis these days seems to be more in living space and entertaining especially when it includes generous outdoor areas , so I would make that your priority.

Am so pleased for you, Lucy. What a lovely home and it very much suits its gorgeous setting. Love, love, love the use of timber, and all that glorious light. I now also have a serious case of dining chair envy. And the view! No wonder you’re (rightly) pleased. Health, happiness and many, many years enjoying the fruits of all your hard work to you and yours And to all the lovely Houzz community members who helped Lucy, and myself, cheers you wonderful people

much as i love an extension with such an unusual tiled roof, a resident builder and no kids my first idea would be to focus on reducing any mortgage and doing a mostly DIY renovation within the existing floorplan with enough space to include three bedrooms, two living areas, eat in kitchen, inside laundry and powder room, add a carport to allow more storage in the old garage and enclose the outdoor laundry to create a generous covered entertaining area, garden storage and extra toilet...the existing bathroom could be improved to equal or exceed a standard ensuite without needing to be enlarged and if/when you need more space and/or the roof needs major work then think about removing the old garage and laundry and reconfigure inside to allow for extra bedrooms with an extension to include a new family living area, outdoor entertaining and a better garage with more storage hopefully the slope of the land can be incorporated into a slab on ground floor although a step up across the extension might be necessary and ceiling and roof height variations may need to be accommodated by having the new rear entry, laundry and pantry built as a link to separate the old and new roofs (and maybe avoid needing to change the old roof?)

please include a site plan showing the house with distance to all boundaries and some photos including a google earth image of the roof would also help