Buy land - they’re not making it anymore.

Vacant land seems like the light at the end of the tunnel for many people who are looking for a way into cottage country on a limited budget. While there are still affordable waterfront lots available in area, many buyers don’t understand the additional costs and potential barriers that building from scratch can present. Buying land with an existing structure will almost always be less expensive than developing a vacant lot.

If you are lucky enough to find a great piece of land and have fallen in love with the location and view, you are going to require a substantial amount of capital to develop it. Because there is no existing structure on the land, most lenders will only approve a mortgage for 50% of the land, if they approve you at all. Interest rates will also be higher as vacant land is a higher risk than a developed lot.

After you have purchased the land, you now have to build the cottage. Even if you are handy and plan to build the cottage yourself, you may have to clear the lot of brush and trees, level it and put in a driveway. Then comes septic and water systems. 

A drilled well is the ideal solution for clean, drinkable water, but you can also chose to install a water filtration system and pull your water directly from the lake or river. Simply bringing water and septic services to the lot can cost between $10,000 and $20,000.

Don’t forget permits, surveys and all of the other paperwork involved in planning your build. And should you chose to have a contractor build your dream cottage, current building costs are between $300 and $400 per square foot. That translates to around $350,000 for a 1,000 square foot cottage, on top of the costs you incurred for the lot and septic. 

Most municipalities will not allow you to put a trailer or any type of temporary structure on the land unless you are building a permanent dwelling on the property. That means you can’t get around the building costs by clearing the lot, installing the septic, and then parking a trailer on the property. 

So, how do you find that champagne cottage property on a beer budget? Patience and a plan. Research cottage country and find the lakes that are best suited to your needs and then wait. When a property within your price range becomes available in your target area, look at the land and state of the services, not just the structure. If the building is in decent shape and you can enjoy it now, while you save and plan for a renovation, even better!