It really depends on the specific situation. In general, it is usually cheaper to build up rather than out since you can make use of the existing foundation and structure. Building up also generally requires less materials than building out. However, there are exceptions to every rule. If you have a crooked or uneven Foundation, it might be cheaper to start from scratch with a new foundation by building out. Additionally, slopes or other difficult terrain features can sometimes make it more expensive to build up rather than just leveling off the land and building out.