Hey Amber
I've been in my place since 2003 and renovated all rooms bar the original bathroom. I've pretty much done as much as I can myself, without touching wiring, major construction, plumbing and the like. I've left building the kitchen to the professionals as well. The old house was just a blank canvas internally with everything original!
First things to consider - can you stand living in a place full of gyprock dust, tradesman etc? Can you have part of the house 'untouchable' whilst the others are being renovated? Do you have one bathroom - and how will you cope showering etc whilst that is out of action.
In those 6 years we painted, gyprocked, got the floorboards polished, roller shutters, new kitchen, demolished and rebuilt the back room, rebuilt fences, did the front yard, paved about 130sqm, put a carport and verandah on, new roof, guttering & did the back yard. All this at great cost.
The first thing we say to anyone thinking of reno's is - we wished we'd demolished the house and rebuilt.
The back room cost us in the vacinity of 80k in 2006. My next door neighbour is getting an extension from the same company and he's been quoted about 130k for roughly the same area.
If you do go with the extension, work out what space you want, then add 2 metres to every dimension (except height which is normally determined by your roofline). I say that because although we got an 11.5 x 5.5 extension, you can always do with the extra space. Given that though, if we went with 13.5 x 7.5 we'd be saying the same thing - 'give me more room'.
The builder and designer gave us some good tips - 1. build an extra bathroom into the plans. 2. get an ensuite if possible. 3. don't skimp on space 4. render if possible (that way they don't have to match bricks).
The major things I keep in the forefront of my mind;
never live in the place you're renovating (too hard to co-ordinate the missus and kids with hammering/drilling etc)
build a bit bigger extension than you need
when my fences were down out the back to bring the building materials in for the extension - we got stuff stolen (we back onto a reserve!)
be careful with tradies or sales reps who say "sign now and we'll take of x%" (got caught BIG TIME once)
So in summary, if you can - demolish and start again. The thing is, despite having a "new house" inside, we're still in a 1973 house!
I can send photos too if you want.
Cheers
gadj