Step 1: What is your why? You've determined you want more space and extra square footage, but it's important to decide exactly how the new room or rooms will be used so you can design them accordingly. Step 2: Do your research. Make sure you have all the correct building permits filed with your city and find out about any regional restrictions like limits on the number of stories you can have, or lot line considerations before diving into the project. Step 3: Set your budget.