Here are some pictures.

Can you steal any space from neighboring rooms or closets?

Perhaps we could bump it out wider on the tub/shower side into our bedroom but I'm thinking my husband will balk at that as he's already redone the bedroom with new flooring, trim and pine walls and ceiling. Plus it would make a funny jut out into the bedroom. If we wanted to keep the wall flush we would have to change 2 closets and the doorway in the bedroom as well.

One other option would be to take down the linen/storage closet that's just outside the bathroom door on the shower side. The washing machine is opposite that and we could incorporate it into the bathroom. That would give us another 3 feet or so in length. But we would be seriously pressed for closet/linen storage space in the house if we took that out. Our house is only 1200 sq ft and all storage space is at a high premium. And again, it means changing the fir flooring that my husband has put down in the hallway and since he put it down raw, sanded it and then stained it I don't think he's going to be too keen.

It's a good suggestion though and one I'll think more about.

Have you considered turning this one bathroom into 1 full bath + a half bath. I'm hoping this is a viable option with the half bath accessible from a bedroom or a hallway. I think it's worth losing a large window and compromising with a shower/tub combo to gain a half bath:

I just read your comment above my last. It sounds like my drawing might put the half bath in your bedroom? That would be great. We also live in exactly 1200 square feet (3 bed, 2 bath.) We've managed to squeeze in 2 full baths, you should definitely have at least 1.5.

Wow, that is an interesting idea! We could really do with another 1/2 bath in the house. The wall with the shower and tub currently on it is the master bedroom wall so the 1/2 bath would only be accessible from the master bedroom but still, it's really something to consider. I'm not sure though. 2 quite small bathrooms versus 1 not so small bathroom. Hmmm.

Oops, we were posting at the same time. Benjesbride, your house sounds like it's much better planned out than mine. We have only 2 bedrooms and 1 bathroom. I'm desperate for a guest bedroom. I know we should give up space in our master bedroom (it's 15x15) but it's the one place in our house that really feels spacious. And like I said, since my husband's already redone it I'd have a very hard time convincing him to change it.

5x8' bathrooms are pretty standard for homes the size of our homes. Another way to think of this is... If you had 1.5 bathrooms already, would you remodel them to make one big one?

Our master is 13x12.5. It had to be big enough for a king size bed:-) My kitchen is tight, where yours might be larger? Ours is 7.5' x 12.5' galley. When we did a gut renovation, we turned the kitchen into a 3rd bedroom and put the skinny kitchen in the end of the living/dining room.

In case it sparks any ideas for your house. This is what we did with ours earlier this year. We gutted the whole house and changed everything, but bedroom 1 used to be where the old kitchen was:

Our kitchen is galley too. Do you have much storage space in your house? I don't see any on the drawings.

We, unfortunately, have a large fireplace/hearth running the entire length of the living room that takes up about 3 - 4 feet of space between our living room and bedroom. My husband won't let me use the fireplace because it's inefficient but he won't agree to taking it down because he likes the old brick. So many compromises when renovating with someone else.

We have alcoves in the master, bedroom 2, and the laundry closet with Elfa systems from the container store. You'd be amazed how much those spaces can store; each "closet" has a rod plus 2-3 shelves above (ceilings are 8'6"). We opted for open floor space instead of more built in closets; free standing cabinetry offers us more flexible storage. In the master bedroom the bed is flanked by dressers that have unique hutch type cabinets above them. In Bedroom 1 we have a full size murphy bed flanked by two armoire type floor to ceilng cabinets. In the "mudroom" we're installing floor to ceiling cabinetry.

We have to be very vigilant about what we bring into the house. Everything has to be super functional and hopefull serve multiple purposes. For example, the dining table is on locking casters so we can easily move it around. The TV is inset into the wall and all digital and wireless, so we have no need for furniture to hold TV related stuff. We don't have a garage, but we do have a basement where we store rarely used things.

Our last house was 2200 square feet and it wasn't a good fit for the four of us. Lots of unused space and lots of STUFF. We're really enjoying the smaller home and being more intentional about our possesions.

This house was built in the late 40s and came with a gigantic pink fireplace. We tried to work around it, but ultimately removed it and it made all the difference. It sat right about where the main bath sink is. By removing the fireplace, it freed up the square footage we needed for two full baths and a side-by-side laundry.

Sorry for the long story. I really love smaller homes and the challenges they present.