I'll add another vote for, at a minimum, switch bedrooms with the kids. We have two bedrooms in the upstairs of our house, and we sleep in the smaller, weirder shaped one and gave the kids the big one. Awesome decision--we use the spaces differently. We just sleep and store clothes in our room (well, mostly ;) ). They actually play in theirs, so they need the space.
Going forward, I think lofted beds are a good solution that give older kids a reasonable amount of privacy (after all, that's what I had in a college dorm). I also think this expectation that older kids "need" their own room is a very new one. To give an extreme example, my MIL was one of 14 kids in a rural, working class family. Suffice it to say, no one got their own room unless they moved out.
That being said, we're considering a potential addition on our home as well. We have a cape with one dormer on the second floor and we're considering popping out the other dormer to give us another bedroom and more easily accessible storage space. The considerations are as follows:
Pros:
-extra space, as we're expecting to have at least 3 and maybe 4 kids. This means 2 kids per room, and we take the current guest bedroom downstairs.
-There's a non-zero chance that at least 1 of our 4 living parents may want / need to move in with us at some point. More space makes this more of a possibility.
-The housing and rental market in our area is red hot and will likely stay strong over time as there's a university nearby and a lot people who can't afford to buy. We have no itention to sell, but if we wanted to downsize and rent this one out, we'd get a very decent monthly rent.
Cons:
-I'm thinking at least $50K to do it right
-Life disruption. This is the big one for me. We'd basically all have to sleep in the basement for a summer while they worked on the upstairs