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^ Sounds like my parents as well.
3500 sq/ft house, they use their master bedroom, kitchen, and family room. They have a three-car garage that is slammed with stuff (no cars).
Our house is 2500 sq/ft and we have the top floor which is about 1300 sq/ft with the ground level as a rental.
1300 sq/ft is ok with young kids, but once the kids become teenagers, I can see the space not being big enough. We can only host two families for hangouts and even that is tight. We wouldn't be able to comfortably afford our mortgage without the rental, so we'll have that for the next 21 years.
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