Costs are about a draw. Building up means you won't have foundation costs, but you may have costs to repair the 1st floor. For example, adding a second floor will usually require larger joists to replace former rafters, this may require replacement of the downstairs ceiling. No matter which way you go a roof must be built, so the demolition of an existing roof does not add costs per-se. The deciding factor is going to be how your original foundation was built. For a two story building, you will generally require at least a 18" footer, rather than a 12" footer for single story construction. You can add on to the footer by digging next to the old one and tying in with metal. If you have an as-built set of plans your decision will be easier. In any event, this addition will require permits and inspections. If you don't know code requirements, you are going to take your concepts to a designer or builder before construction begins. That does not perclude DIY, but it sounds like you need to do considerable research concerning your existing construction and local code requirements.