Let's Talk

(503) 461-7046

Should I build on a City Lot or on Rural Acreage?

Weighing the options of home construction?

Should you build on a City Lot or on Rural Acreage…

When you are determining where you would like to build your dream home, the old adage of location, location, location comes to mind. This is especially true if you’re unsure of where you want to build. So, the question becomes, is it better to build in the city or on acreage? Is one cheaper than the other one?

There are many variables that may come into your decision making. Do you want to be close to schools, shopping, restaurants? Or, are you looking for open spaces, to be closer to nature and don’t mind driving to the conveniences of the nearby town? The other detail to take into consideration is the site conditions. Meaning, the city lot is most likely already set up for utilities. Whereas the rural lot may need additional resources brought in to make the property livable. Also, the costs of permits for each location can be quite contrasting.

New Home Construction On A City Lot

Typically, when you purchase a lot located within a metropolitan area, power, water, and sewer are readily available. In general, the infrastructure has already been built up, i.e. streets designated, and city services established. The drawback to having access to incorporated city services is building permit fees are usually pretty hefty. Some larger cities, like the City of Portland, will provide you with a permit estimating portal to help you budget for your permitting costs. If the city you would like to build in does not have a permitting calculator, usually a call to the building or planning department can provide you with an estimation of what the cost of your permit may be. Another concern to think about is that the lot you purchase may be within a Homeowners Association (HOA). An HOA community may be a bonus to some and a bust to others. Homeowners Associations can limit and/or dictate everything from the color you paint your house, to your exterior lighting, how often you cut your grass, to the monthly fees paid. If you are considering buying a lot within an HOA, do your research. We have linked to a helpful and educational article from Realtor.com A Homeowner’s Guide to HOAs: Homeowners Associations, Explained. This provides you with the ins and outs and what research you should do, prior to building your home within an HOA. One last item to take into consideration when deciding on a city lot, can you build the type of home you want on the site you’d like to purchase? It is imperative to research the property completely. Calling the city, you are looking to buy in is a good start. They should be able to provide you with what type of restrictions may be placed on the land. Beyond the zoning of the property, there are additional questions to ask yourself. Is it part of a neighborhood association? Are there environmental concerns, is there a creek or stream running through or by the property? If you can, speak with the neighbors and find out what concerns they would have if a home was built on the lot. In the end, completing your own due diligence could possibly save you time and money. There is the example of owners who purchased a property in a heavily forested area within the City of Portland, excited to start their future home, is now stuck with a vacant lot due to a neighborhood association appealing their building request. Unfortunately for this couple, they may be stuck with their plot of land and no house to build.

Rural Property Home Construction

Although acreage may have lower initial costs, there are possible extenuating circumstances that could bring the price closer to what you pay with a city lot. The additional expenditures have to do with access to existing or non-existent infrastructure. If an older or manufactured home is on the property, alterations may only have to be made to the existing utilities. On the other hand, buying a vacant rural lot will most definitely have higher costs associated with it. When you purchase a lot with an existing dwelling on it, that is either going to be torn down or removed, there should be basic services that run to that property. This could include everything from paved roads to electricity. A well may have already been dug and a septic system in place. If this is the case, modifications to the existing components can be made. This may mean that the power grid for the new home will need to be updated, the septic system and drain field will need to accommodate a larger home, a new propane tank added and testing of the water from the well may be necessary. Overall, these alterations will add costs to the new home, but at a more minimal price than adding brand new services. Investing in vacant acreage does come with some increased expenses that will need to be budgeted for.


Your builder will need to work directly with the power company to bring in electricity to the property. The price is dependent on how far out your land is compared to the rest of the homes near you. On the flip side, installing solar panels can help to offset those initial high costs.

Septic System:

a site survey will need to be completed to figure where the system will need to be placed. The installation of the system involves excavation and set-up of the tank and drain field.


first, drilling for the location of the well. Although uncommon, the proper location may not be hit the first time. Or, the first well may not yield enough water to sustain a home. With the septic system and the drilling for the well, it is extremely important to do research on contractors and your state requirements. The State of Oregon provides homeowners helpful materials on Septic Systems and Well Water. Each County may also have additional requirements for the property for the installation of septic or well systems. Although these initial costs may seem a bit intimidating, the absolute bonus is that you will be on your own acreage, with neighbors at a minimum. You have the ability to plant trees, have a large garden, make it your own and create your own scenic surroundings.

The bottom line, when you are exploring lots to build, start first with your custom home builder. Whether it is a city or a rural lot, a home builder can help you navigate a course of action. Especially when it comes to acreage, they can go with you to visit the site. By observing the property, they can tell if a well is on the property, research if you can even get septic approval for the site (there may be environmental concerns that would preclude the installation of a septic system).

Home Builder Oregon map

Creekside Homes is here to help support you through the home construction process, from property purchase to final occupancy of your custom-built home.

Our goal is to find the right property that fits your construction budget and vision.

Know what you can afford before you begin. For the past eighteen years, my company Creekside Homes has been building magnificent, custom-designed homes for the luxury market. The information in this guide (highlights from my years of experience) will help you make more informed choices and have less stress and greater confidence throughout the entire process.
build a quality home book

Let’s build your dream home in McMinnville, OR

My book offers a checklist of “What To Do Before You Build.” click to get it. Are you ready to get started, or have questions, just fill out the easy online form or call 503 389-6890

Here’s to building your dreams…!

Andrew Burton home designer

Wait, Before You Go!

Grab Your Copy of Our Custom Home Planning Guide

Discover essential insights for your dream home:

  • The 10 Critical Questions to ask before building
  • 8 Key Areas to invest in for your perfect home
  • Top 11 Mistakes made by new homeowners
  •  7 Invaluable Checklists for smooth planning