I bought a 2 bed 1 bath 1,250 sqft house with a basement and attic in Nutley, NJ. The house was built in the 1920s and the attic has about 6 feet of head clearance at the highest point and has two dormer windows that I'm currently using as a bedroom.
I want to expand my house into a 4 bed 2 bath. I have 40 feet of space in my backyard (see the picture with the basketball court) and even another 20 feet beyond that. What is the cheapest way to add value to my house? Should I build upon the attic or extend the ground floor back 40 feet? My house is exactly 20 feet wide inside from wall to wall.