Why do a remodel? Is it to change or improve the function? Is it the necessity for more space? Perhaps it is simply for investment purposes. It could be a combination of all three needs and maybe more. Identifying your core purpose(s) for a remodel will assist you in establishing your goals and boundaries.
Increasing functional living space is probably the number one reason behind a remodel; whether it be a new addition to the family, maybe the parents don't have the energy any longer to care for their own home, maybe you need dedicated office space, maybe there's a new hobby, or you simply need more storage. Either way, more space is a necessity....whether it be a reconditioning of non-functional or unused space, or simply "adding-on". Dependant the floor plan, the age of the house, the lot size, building restrictions and codes, all will potentially influence and impact your decisions for the intended function and size of the new living space.
Another popular reason for remodeling is to improve or modernize existing living space; not add space but simply upgrade it; your kitchen with new lighting, plumbing, cabinets, counter tops, windows, or even change your flooring; maybe you are focusing on enhancing your master bedroom and bath with marble or granite, adding a jetted tub, creating a more elegant and spacious shower; upgrading your family room with French Doors, sky lights, built-in entertainment centers. The opportunities are endless. You don't necessarily have to change the amount of space you have but re-interpreting it could very well increase its functionality.
Remodeling can also be an investment. Some people buy "fixer uppers", remodel them, and sell them in their community, making a very good living doing so, especially now when there are so many homes being forced on the market through Short Sales or Foreclosures. The key to this is to know the market value spread of the neighborhoods of the the subject properties and which improvements to make providing you the best possible return on your investment. Know what sells best in your focus neighborhood, what your financial objectives are, have a strong team (contractor, interior designer, real estate agent, etc.) in place, and how to find the diamond in the rough. Remodeling your existing residence can also be a superb investment. The average buyer is over-whelmed by the home purchasing process. They don't want to have to think about "fixing up". They want something they can move in to immediately....they can visualize a happy, comfortable lifestyle. A remodel will certainly spruce up your home, increase it's first impression appeal, and give buyers less to knit pick in an attempt to negotiate the sales price down. Often times, it does make sense to do a remodel before looking to sell.
Bottom line - remodeling can be fun, very rewarding, and profitable. Often times a remodel will incorporate a reinterpretation of space, an enhancement of space, and adding on to your existing space; all three combined but not all proportionate. Make sure you know and thoroughly understand your motivations, know your goals, know your budget, and get opinions, especially from professionals who are active in your neighborhood; these are the experts who understand the nuances of building and remodeling homes similar to yours, preserving the architectual flavor and community symmetry.