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With all that goes into constructing a new house, building a dream home is not for the faint of heart. Undoubtedly, one of your biggest considerations will be whether to build on a developed or undeveloped plot. There are advantages to both: Because the home is new, it’ll likely boast modern features and energy efficiency and be built to code and secured with the builder’s warranty. Not a bad deal, considering the amount of home inspection horror stories out there.

Because the terms “lot” and “land” are often used interchangeably, it’s important to note that for the purposes of this article, “lot” will refer strictly to developed properties divided up by builders (i.e., located in subdivisions), and “land” will refer to any undeveloped piece of property.

So, lots vs. land–which is it going to be? Weigh the pros and cons below:

Lots: The Pros

  • Price advantage and foreseeable price appreciation.
  • Established roadways, either maintained by the municipality or by homeowners.
  • Water/sewer provided.
  • Electric, phone and cable lines wired.
  • Builder disclosure of land concerns, such as drainage and soil.
  • HOA fees typically include lawn care, trash pickup and other community maintenance.

Lots: The Cons

  • Cookie-cutter floor plans.
  • Minimal outdoor space.
  • Close to neighbors.
  • Restrictions on cosmetic changes.

Land: The Pros

  • Homeowner can be involved in all aspects from start to finish.
  • Cleaner air, if located in a rural area.
  • More potential for eco-friendly features, such as solar panels.
  • Isolation, if desired.

Land: The Cons

  • Zoning changes.
  • Costs to transport building materials.
  • May need to install a septic or dig a well.
  • May need to run electric, phone and cable lines.
  • Need to install a generator and/or propane storage.
  • May need to pave an access road.
  • Potential land hazards, such as buried oil tanks.

Keep in mind that these lists are not exhaustive, and what works for some may not work for others–some people like living close to their neighbors, for example. Before you break ground on your dream home, make an informed decision by carefully considering all the pros and cons of developed and undeveloped plots. Happy building!