The step-by-step process for buying land to build a cabin or small house on. Find your own parcel for an outdoor lifestyle.
There’s something to be said about opening your eyes at the morning’s first light, and immediately stepping outside to behold the rising sun, the wind on your face, and the humbling sight of nature’s beauty. Sounds great, right?
For most of us, this isn’t exactly how we start each morning. But, for most of us, we wish it was. The thing is, realizing that wish doesn’t have to be far out of reach. That doesn’t have to be a fantasy. It can (and in our minds should!) be your reality.
As lovers of the land, and modern-day pioneers of a more connected way of life, buying a slice of Earth and building a cabin to bring you closer to nature could be the first steps towards this better way of living.
Here, we aim to help you get started with purchasing your ideal piece of land for building a cabin or tiny home. These are the basic steps to take towards buying land for building, which you can begin with right now:
- Understanding the benefits of buying land
- Knowing the current property market
- Knowing your eligibility to buy land
- Finding real estate
- Defining your land search criteria
- Considerations for your ideal property
- Your land buying team
- Defining a purchasing budget
Why buy property
Having a piece of Earth to call your very own is one of the greatest luxuries available to mankind. The feeling of stepping over the threshold to your property is unlike anything we’ve experienced before. At that moment, you are one with the land and you are more than just a body standing on the ground.
Owning land is about destiny, legacy, it’s about something greater than yourself. It opens doors to possibilities that were never in reach before, it opens doors for you to decide what your future holds and how entwined with nature you can become. Once these freedoms become your reality, you can begin to plan for your land and what you’ll make of it. For us, that means what sort of build might we embark on, what sort of future will we create for ourselves and our loved ones?
The benefits of actually buying your own property are endless, but a few of the main points are knowing that you have full control over your parcel, and the ability to build your own home.
Land as an Investment
Putting money down towards a land purchase makes a log of financial sense. Within a few years your investment may grow considerably in a hot market, all while you do little more than sit back and enjoy the mountain view or the sound of waves hitting the sand.
As the value of your land increases, it also opens up more opportunities for you. The equity you build as the land improves in value allows you to borrow money from a bank against that added value. Think about what you can do with that money. Maybe… build a cabin?
When you invest in a piece of property, you own something completely unique, something that no other human can say they have.
Sure, your buddy might also own a parcel, but does the sunshine rise over the distant trees each morning at the same exact angle? Do the grasses grow and shift in the summer breeze just the same? Does the same family of birds return to that beautiful nest spring after spring? Of course not. These things are uniquely yours. Isn’t that beautiful?
Ultimately, the value on land (in theory) increases over time. So, as you’re realizing your dreams of getting back to nature and connecting with the land, you’re also setting yourself up to make money. It’s a win-win.
Freedom to Create Your Ideal Existence
Investing and other logistics aside, buying your own piece of land gives you full control over your future and the type of life you want to live. Once the land is yours, it’s yours forever unless you choose to sell.
You can select your ideal location, the qualities you want in a parcel, the exact spot you want to build your home, and any other freedoms of existing that you might not be able to do on someone else’s property. In other words, your own piece of land is a step towards living life to the fullest as a nature lover and connection seeker.
If anyone has ever told you “the world is your oyster,” now, it really is.
Buying vs. renting
A common question we come across in the land buying process is whether or not you’re sure you want to buy, or if you should rent first instead. Since our ultimate goal with purchasing land is to build our own house, we’re ruling out renting as a potential option, though we’ll address the question at hand.
It seems obvious, but it’s worth mentioning that when you rent property you don’t usually have any rights for building or adapting the land for your own long term usage. Even if your landlord seems reasonably willing to allow for this scenario, they could ask you to leave at any point once your rental terms are up. Long story short, you don’t want to go through the building process only to have to leave your home and throw away the time and money you spent.
The current property market
The property or real estate market is, in simple terms, the current state of value and availability of property available for purchase and sale in any given locality. While this is in constant flux depending on the economical state of the world and how many people are looking to buy or sell, it’s best to get an understanding of the current market exactly when it is you would like to buy.
As of 2020, the overall housing market is at or around $33.6 Trillion. That’s nearly 3 times what it was in 2010. Coming into 2020, mortgage rates were low, employment was high, and there was a solid demand for property and home. Right now, mortgage rates are at historic all-time lows. So, it’s time to BUY!
Who can buy land?
So, who can buy land in the US? There aren’t many restrictions on who can legally buy land in the US, as long as you have the means to do so. Citizens of the United States and foreigners alike are eligible for land purchases, though there may be different requirements based on your citizenship status.
Where to find real estate
Now that you’ve worked out the nuts and bolts of why you should consider investing in a land purchase, and started to develop your own fantasy of your future building projects and memories to be had, let’s talk about where to find your ideal parcel.
Your search begins long before you visit properties. Even in the depths of winter, hunkered down with a cup of tea you can begin to imagine the summer to come, and where you’d like to be when fireworks light up the skies on the 4th of July.
Do you picture yourself deep in the woods, peering through tree growth and pine cones up at the bright shining sun? Or, are you standing on the side of a rocky mountain taking in the vast landscape that lays beyond your toes? Maybe you’re actually running through tall beach grasses towards a glittering ocean. These thoughts, desires, fantasies are the beginning of your search for what a perfect piece of land means to you. They set the stage for how you’ll browse listings and which properties you’ll visit in hope of putting in an offer.
The options for where to buy land vary widely from online listing sites to word of mouth unlisted sales. As long as there is a legally recognized transition of ownership, any source of purchase is just as valid as the next.
That said, getting your search underway online is a great place to start since most listing sites allow for filtering based on land size, location, property features, and more. These are a few of the first places to look if you’re focusing your search primarily on land to build your own home on.
Sure, we all know Zillow as the top listing location for homes and buildings, but it’s also a great place to find buildable land parcels and shouldn’t be ruled out in your search.
LandWatch lists stunning acreage all across the US, including some parcels with existing homes. They also have special sections for things like auctions, hunting land, and farms and ranches.
Similar to LandWatch, Lands of America features farms, ranches, acreage, and country homes across the US with easy filtering options.
With LandFlip you can search rural land, hunting, and recreational land while creating a free buyer profile to match you with the best plots.
Don’t discount Craiglist! For lots of folks selling land, Craigslist is a logical first place to list without an agent taking fees. If you’re looking for more of the friendly neighbor-to-neighbor transaction of land, this could be a good bet.
Land and Farm fits the bill with the above listing sites, and also offers commercial land listings which could be good for events or venue builders, for example.
Defining your search for land
Before you narrow down your search for land, you’ll have to define what type of parcel you want to buy. In your initial fantasies of waking up each day on your own parcel, what do you see when you open your eyes? This, of course, includes most basically location. What state, region, or even neighborhood are you looking to buy into? But also… what do you see, hear, and smell? Salty air and seagulls? Chirping frogs and mud? Crisp air and wind blowing?
Other things to consider are the intended use of the land, what your budget looks like, and what sorts of property features are must-haves for you or non-negotiables in terms of what you don’t want.
Do you have your heart set on waterfront access or mountain views? Add things like this to your list of ideal property features. Are next-door neighbors an absolute “no” for where you’d like to build? Make sure that’s on your non-negotiables list.
Technically speaking here, buying a property for hunting or recreation is a far different venture than buying land with the intention of building a home from the ground up.
When you walk the next property you’re interested in putting an offer down on, keep your eyes, ears, and hands at the ready. Do you see healthy green space? Can you hear neighbors? When you dig down a few inches in the soil, do you hit water?
Be an active participant in a walkthrough.
This is your opportunity to understand the property’s physical characteristics, and how they relate to you as a human on the land. What’s more, is that you’ll get all the information you need in consideration of what you’ll be able to use the land for after you make the purchase.
There are a number of specific criteria your land will legally and logistically have to meet if your main goal is to build. Before you make an offer, you should have all the details and questions answered to the following points.
Zoning and Deeds
Whether or not it’s even legal for you to build a dwelling on your parcel depends on the zoning laws in place for where it’s located. When building a cabin or tiny house, you’ll need to connect with a parcel of land that is zoned for residential. For the most part, look for zoning for SFR, or Single Family Residences.
Deeds can also influence the usage of your property. For example, what if you want to build a cluster of cabins or small dwellings around a main house? You’ll need to know how many structures or primary homes your property is deeded for.
Zoning laws determine any number of things like how many animals you can have on the property, how many buildings you can build, farming regulations, historical protections, and more.
Make sure you know all the restrictions set on your property so there are no surprises based on your intended use of the land.
Unless you’re building an off-grid cabin or home, you’ll want to take into account any utility hookups that might already exist on or near the property. Is there access to a power line? Water? Sewage?
It goes beyond just knowing if you have access to utilities currently in place before purchasing. Some listings might note “nearby” utilities -- make sure you know just how nearby those might be and if you will need an easement or access to neighboring properties to hook up.
What is an easement?
A right to cross or otherwise use someone else's land for a specified purpose.
If any utilities don’t already exist, get a sense of the cost and time it will take to get those installed. The average cost for a new septic system, for example, is $3,280 to $9,550. Adding a driveway and running electricity also cost money!
Keep in mind this can vary greatly based not only on the size of the house but also on the location of the parcel. A remote location with a solid rock ground can have huge added costs to get machinery to the site and to excavate the ground. It wouldn’t be a bad idea, if possible, to get estimates from local contractors before you get your hopes up on any property. These fees can quickly become cost restrictive, to put it plainly. For a little more flavor there, imagine your $20,000 parcel ballooning to $60,000 in cost after utilities are in place, and that’s before you’ve even thought about what kind of cabin you’d like to build!
Another thing to consider is how much preparation your land will need in order to start building. Clearing trees, leveling land, and setting foundations in different types of earth all play a part in how you will have to prepare your land before laying your first proverbial brick.
Is there a public road that leads directly to your property, or will you need an easement through someone else’s land in order to access it? Things like this aren’t always included in listings, so make sure it’s one of the first questions you ask.
Further, consider the current state of the driveway. When building, you’ll need to get materials, tools, and machinery to your building site. After your building is finished, most residential zoning laws will require your driveway to be wide enough for fire trucks to access your home. If there isn’t a current driveway that fits these criteria, you’re looking at another extra cost to put one in.
In 2020 most driveway installation ranges from $1 to $50 per square foot, but most people will pay $2 to $15 per square foot. So for a 1,000 sqft driveway, that cost adds up quickly to anywhere up to $50,000.
Managing water drainage on your property is a huge consideration when building a home and siting our your build location. A wet property might not support the type of structure you want to build, and you don’t want to be unexpectedly caught with standing water for large durations of the year. Furthermore, if there are any recognized wetlands or if your property is in a floodplain, you may be restricted even further about where your future home site can be.
In a mountainous region, consider snowmelt coming off the mountain if you’re buying during the summer. Land could be deceptively dry, but not actually be buildable with the winter and springtime conditions.
Standing water also leads to populations of pesky bugs, and come mosquito season, it won’t be pleasant…
When you inspect the land you can see as your own, walk around and pay close attention to how wet the ground is where you imagine building your cabin. If it rained that morning, the ground might be damp. If there’s substantial runoff from a nearby hill or mountain, you’ll need to reroute it away from your build site. Neither of those things the case? Find our if a fresh water spring might be close to the surface.
If you suspect you might be standing in a wetland, search local maps that show designated areas before you make a purchase. That type of designation isn’t something you can really work with when trying to build a house.
Septic and Percolation Test
For any property without town plumbing (which is most rural properties), you’ll need to plan for a septic system if one isn’t already in place. Septic systems require leach or drain fields, which you’ll want to have a distance away from your home or recreational space. A necessary step in determining where a septic can be placed is a percolation (“perc”) test, and you’ll need to hire a licensed excavator to help administer one.
What is a perc test?
A test to determine the water absorption rate of soil in preparation for the building of a septic drain field or infiltration basin.
Keep in mind, however, there are other options if you don’t want to utilize and install a traditional septic system. Composting toilets and greywater drainage or alternative septics like sand filter systems or trash tanks are also possible.
Your land buying team
So you’ve found the perfect piece of land, done the due diligence of understanding the options for the property, and you’re ready to put an offer down. Now what?
The process of a land transaction is more than just exchanging a check and a friendly handshake. In most cases, you’ll need a small team assembled to help you officiate the deal and legally transition ownership of the property. That might sound overly complicated, but it’s pretty simple when you know who you need help from. We’ll spell it out for you here, so you aren’t left guessing.
In general, here’s what your buying team might look like.
Most listings will likely have an agent representing the seller, which means you might need your own buying agent to transact the deal. You could also double up on using the selling agent, but having your own agent means they’ll have solely your interests in mind, without worrying about the seller.
Most often, your agent’s fees will come out of the sale of the property, so there’s no added cost to you.
While there should be a survey available for the property, if there isn’t one then you’ll need to get one yourself.What is a land survey?
A graphic depiction showing boundaries of the property and other features on the land.
A surveyor is your best bet for understanding where your property lines are, and whether or not your land is buildable. If you plan to build from the ground up and there is no survey readily available, consider this team member a necessity. It’s well worth the time and effort spent to have a professional inspect the plot.
An appraiser will determine if the property is worth the value listed, or the amount you’re paying for it. You want to make sure the purchase price is in line with the land value, as this will further determine things like how much money you can borrow against the land, the resell value, and more.
Your lawyer will handle the contracts and financial transactions on your behalf. Having a lawyer review everything before you sign is critical in the buying process, as there can be hidden legal language that might prohibit your use of the land in any number of ways in the future.
They will also review the title report on the property, to ensure the seller is legally authorized to transfer ownership to you. If there isn’t a clean title report, walk away. Fast!What is a title report?
A document that outlines the legal status of a property and related information on its ownership including various liens, encroachments, easements, and anything else recorded against the property.
Again, this is a place where it’s worth the time and effort to work with a professional.
This is relevant to anyone who is looking for a mortgage or loan, which we’ll get into more below. If this is you, you’ll need a broker from the bank that will handle your account and keep the process moving along on your behalf to get you approved and get the money in your wallet. Generally, these brokers work for the bank, so their fee is paid by the bank with no added charge for you.
Purchase and building budget
Alright, so your team is in place, and you’re ready to jump before someone else snags the parcel you’ve envisioned your future build on. Time to get your budget squared away.
Pricing out your build should include your purchase budget, as these are your first set of costs that will get your building project off the ground. These budgets can be as large or as small as what you have to work with, depending on what your ideal final outcome looks like.
We’ve priced out each budget item here based on national averages, so keep in mind the costs can vary. Fair warning, we’re getting pretty granular here, so feel free to skip ahead, or get deep into the numbers with us!
Land or lot loan
We mentioned above getting a mortgage or loan for your land purchase. While this isn’t relevant if you’re paying cash for your plot, it’s a little known option that could unlock your ability to buy a larger or nicer plot than you originally realized.
Unbeknownst to many, it’s actually possible finance land if you do so with a local bank. Local banks often offer loan products to people who want to own land and eventually build a home on it. While you might not be able to connect with a typical 30-year term for a normal mortgage, you’re likely to get a 10-year term with a slightly higher interest rate than you would with one of the more traditional mortgage products.
Typically for land loans, the cash cost down is a bit higher (around 20 to 30%), but what’s good about purchasing land this way is that you don’t have to risk all your capital on the land itself.
With a land loan, you can save some cash for building your first cabin on the property.Land loan budget = 20%-30% of land cost
This goes beyond your purchasing budget, but if you are all in and ready to build the right house (and financially ready to complete the project), consider a construction loan as part of your overall budget.
Without getting too far into it, this is another short-term and higher-interest loan for building a residence, similar to the land loan we talked about above.
There are a few different kinds of construction loans, but a good one to look for is a construction-to-permanent loan. This provides you with the money you need to build, as well as a mortgage for paying back that cost over time.Construction loan budget = 20%-30% of building cost
Your buying team, which we went into detail on above should be a line item in your budget, as certain team members will have fees associated with their services that you’ll be responsible for. Let’s suppose you’ll need to pay for the survey, the appraiser, and the lawyer at a minimum.Survey budget = $345-$675
Appraisal budget = $300-$450
Real estate lawyer budget = $150-$350 per hour (or sometimes a flat fee)
Whichever locality you are building within you will need to be issued a building permit to begin your project. These building permitting fees vary depending on where your land is located.Permitting budget = $404-$1944
Prepping the property
We mentioned above the necessary steps to prepare your property for building, including any utilities, site prep, access roads, etc. Let’s take most of those into account here, for a conservative budget estimate.Utility hookups budget (if not already on land) = $10,000-$30,000
Conventional septic system installation budget = $3,500-$10,000
Driveway budget = $1-$50 per square foot
Site prep budget = $1.25-$2 per square foot
Building plan costs vary considerably depending on if you’re having plans drafted for you, or if you’re purchasing a set of pre-existing plans. We have priced DEN building plans to offer beautiful and affordable architectural plans to design-minded nature lovers across the country.DEN building plans budget = $99-$399
Buying the Perfect Land and Building Your First Cabin
Once you’ve settled on your ideal plot of land, you’re nearly there in realizing a more connected life that exists within the natural world we were all born into. It can be incredibly freeing, to spend that first night on your own land even before you’ve built any type of permanent or semi-permanent structure.
This is your first step towards a future that you create, and that’s a beautiful thing.
We highly recommend packing up your tent and a few provisions and spending a few nights under the stars on your very own piece of Mother Earth. Not only can this help you connect with your new space, but you can scout out locations to build your future cabin.
...and once you’re ready, we’ve got you covered in selecting the best building plans for your small house.
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- Thorsby, D. (2022, November 1). The do’s and don’ts of buying vacant land. US News & World Report. https://realestate.usnews.com/real-estate/articles/the-dos-and-donts-of-buying-vacant-land
- How to buy land and what you need to know | SmartAsset. (2023, August 25). https://smartasset.com/mortgage/buying-land
- Tomsich, E. (n.d.). Land Loans: Everything You Need To Know. Rocket Mortgage. https://www.rocketmortgage.com/learn/land-loans
- Pate, K. (2023, July 10). Guide To Land Loans. Forbes Advisor. https://www.forbes.com/advisor/mortgages/real-estate/land-loans/
- Luthi, B. (2022, October 23). How to get a loan for land. Experian. https://www.experian.com/blogs/ask-experian/how-to-get-a-land-loan/