My husband, two daughters and I live in a small house. When our two daughters grew into teenagers we really started to feel a little cramped. We debated for years whether we should sacrifice our attached 1-car garage for more living space.
It took awhile to convince my husband to sacrifice the storage space of the garage for more living space, but he finally caved. Renovations took over a year. We had to build a wall where the garage door once was, add a window, insulate, re-sheet rock and build the floor up so that it is level.
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We added the center bump out for architectural detail and to make a space for an electric fireplace. My husband also added the planks to the wall, and we had the mantle custom built. People still ask if we miss having the storage space. We really don't! The extra living space is totally worth it.