Size Matters
When you start building your Sim's home, the layout should reflect the needs of your Sims. A large house is unnecessary for a small Sim family and will actually hinder their success by making it harder for them to quickly move from one room to the next. However, that does not mean the house should be so small that there is no room to move around. A general rule of thumb is to make each room big enough so that there is at least one square of tile around every object for the Sims to move around.
Preparing for Expansions
It is likely that your Sim house will undergo several expansions and renovations as your Sim family grows. When building your house, prepare for these future expansions by leaving some space on the lot where future rooms can be built. Create a wide central hallway and have your rooms branch off from the hallway. When it comes time to renovate, extend the hallway and build new rooms or place a staircase in the hallway to add rooms to a second story.
Multi-Leveled Homes
As your house expands, the amount of space on your lot decreases, leaving you little lawn or outdoor living areas. Build upwards instead of outwards to conserve available space. However, staircases require a large amount of space so plan your home to accommodate the space requirements. Your second story can also be used as outdoor space if you create a flat roof or a combination of both indoor and outdoor space by creating rooms with access to an outdoor balcony.
Thinking Outside the Box
Traditional home design is not a requirement in "The Sims 2," so experiment with your designs to try something out of the ordinary. Since the weather in the game is always sunny you can create a small villa instead of one big house by making each room its own separate building. Place support pillars on the lot and place floor tiles on top to create a home that is raised off of the ground like a tree house. Create a moat around your home with the pool tool or water options under the landscaping tools.