It depends how comfortable the basement is. In general, I would prefer an added bedroom to be near the other bedrooms (or on the main level with the other bedrooms upstairs). So I would do the addition.

In my area, basements tend to be cold and can smell musty. Radon is also a concern. Walkout basements with lots of natural light are more appealing to me, but I would still rather not have a bedroom down there (unless it is an infrequently used guest bedroom). Also, I prefer wood floors in a bedroom, which poses a challenge in a basement.

Along those lines, garage space is really important -- I wouldn't give up garage space for a bedroom.

Actually this was easy as we have neither a garage or basement.

We are actually in the process of converting the main portion of our basement to a master bedroom/bathroom. Then, we are tearing down the existing garage with a sun porch to rebuild/expand it (settlement issues). We had the option to finish the basement as a living space and build a suite above the garage, but decided to go the route of bedroom in basement. Many will say we are crazy, but we don't spend a lot of time in the bedroom, and when we do it's dark, so the light issue wasn't huge. Also, in-laws may be living with us from time to time and we want the privacy of having our bedroom on a different floor. Now, the sunroom will be an awesome place to hangout with friends and family.

@CLC check out these two beauties:

carpet floors

813 4th Avenue, Westfield, NJ · More Info

wood floors

316 St Georges Westfield · More Info

@ T.J. here's an idea of a basement bedroom

1000 Seward Ave, Westfield · More Info

A add on to the home is better, unless you have a way to heat and cool the basement. Basements are nice but can give a cold feel. Depends on the state and area it is in!

Ken

I think adding an extension is a great option. It allows you to be a lot more creative with the design, size, and shape. For the most part when remodeling a basement, you're limited to creating inside of the four existing walls, which is a bit constraining.

If the basement is dry and light, I vote for it, because it is space that's already there. No additional footprint. And isn't it likely to be less expensive than an extension?

I hate basements.