A somewhat common dilemma is whether or not it makes sense to renovate and / or add-on, or whether you would be better off finding a more suitable home or cottage, and move.
In some situations, especially older cottages / waterfront properties, another option is present; would you be better off taking down what is there, and start fresh with a new cottage or home.
There are numerous considerations which should be carefully evaluated.
Unfortunately some of your considerations may be challenging to evaluate objectively, especially those that involve emotions. If, for example, you've lived in your home for many years, or your cottage has been passed down through the generations, sentiment may override practicality / logic.
To assist in determining if it may make sense to renovate and / or add on, or to possibly tear down & build new, you first need to ask yourself some basic questions.
1. GENERAL LOCATION
Is this where you really want to be? Is it the right neighbourhood? Is this the lake you want to be on? Would you prefer to be somewhere you could walk to more places; a cafe, the park? Does it take too long to get to your cottage? If you are not where you really want to be, seriously consider moving to a location right for you.
2. SPECIFIC LOCATION
Is your specific location working for you? Or are there issues? Do you get enough sun in your back yard? Do you have enough privacy? Do you really want a much better view? Depending on your concerns, some of this may not be fixable, and some may. For example, an addition could be positioned so as to block unsightly views and / or provide privacy from a neighbour.
3. HOW LONG WILL YOU STAY THERE?
If you do not see yourself staying there indefinitely, resale value should be a very serious consideration. If you'd like to stay as long as possible, make sure your home or cottage will accommodate your changing needs; including possible mobility issues. This includes access, a main floor bedroom, large washroom, and so on.
4. WHAT ARE YOUR PRIMARY GOALS?
What are you most concerned with? More space? How much; a little or a lot? Or is your current layout all wrong, with improperly sized rooms.
5. ARE THERE OTHER THINGS YOU WANT TO IMPROVE?
How well does the rest of your home or cottage work? Really well, generally okay, or is there more that you would want to change? How much more? Minor adjustments, or a lot? What specifically?
6. WHAT WILL ZONING BYLAWS ALLOW?
Bylaws dictate what & where you can build; min. distances from property lines, max. footprints, and max. heights. Generally the bylaws are not an issue (unless you have a small lot, and require a lot more space) - but the bylaws need to be investigated.
7. HOW MUCH IS THIS WORTH TO YOU?
Try to come up with an approximate budget figure of how much you may be willing to spend to address your objectives.
8. HOW MUCH WILL IT COST?
If possible, try to determine roughly how much this may cost to construct; builders may do so. If however you are unclear as to what you might possibly do, getting budget prices may not be possible. A catch 22, but you may have to look at some basic designs first, so as to be able determine potential costs.
9. RESALE VALUE
If resale is of any concern to you, try to determine how much more your home or cottage may be worth after the changes, compared to its present value plus the cost to make those changes. Are they close? Would it be worth it to you?
Evaluating the above may be challenging, especially certain aspects. You may not arrive at an overly clear answer, but with luck you may have an indication as to what way may make more sense - or at least, which possibility to investigate further.
Ultimately, you will likely need to determine your priorities.
If you are spinning your wheels and not making much progress, it may be worth getting professional assistance