Choosing a Lot for a New Home


Less than an hour into our meeting on their beautiful new property, the young couple was crestfallen. They had jumped up and paid cash for a “steal” on a piece of undeveloped land. Then they came to me to discuss building their home. We walked the lot. Oh boy, the view was terrific. But as we reviewed the costs to prep the land for building a home, it became apparent their steal wasn’t such a bargain after all. The steep, rocky slope would require a long driveway and extra costs for foundation and retaining walls. Some drainage issues would require study. Were parts of the property in a flood plain? Hooking up to the electric utility would require installing a pole or two. Then there was water. And septic. It was all do-able, but it would just require more out-of-pocket expense than they had bargained for. Don’t be in a hurry when you’re looking for a lot. Take your time and do a careful evaluation.

How do you choose property for a new home?

People often ask me to evaluate lots they’re considering for purchase. Let me give you some things to consider.

Location and amenities – what do you want?

  • Urban infill or outlying?
  • A developed suburb or rural?
  • Privacy or active community?
  • Do you need nearby schools?
  • Are there nearby stores and parks?
  • How far from work will you be?
  • How’s the traffic in the area?

An urban infill lot

With a city lot, you get lifestyle and community. You get access to transportation, services, stores, and schools. You have fewer land-prep costs because utilities are likely already available at the curb -- electric, gas, water, waste water, phone/cable/internet.

Of course, a city lot costs more. You have less control over how to orient the house for sun exposure. You might have limited room for rain water collection tanks. You’ll face restrictions imposed by zoning and deed restrictions. Sometimes, when you tear down or move an old house, it’s better to run utilities anew from the curb due to the age of underground equipment.

Some questions to ask:

  • Where is the lot setback line?
  • Are there any easements?
  • Is there room for rain water collection?
  • Can your house be situated for solar installation (a southerly roof exposure)?
  • Does the house you have in mind fit in the neighborhood?
  • What about the zoning?
  • What’s in the deed restrictions?
  • Are there any city ordinances that limit the size you can build?

A lot in a subdivision

Beyond urban infill, you can find property in a wide array of readiness. In a subdivision, some of the infrastructure you need will be readily available – utilities, water, sewer.

Some questions to consider:

  • What’s the lifecycle of development in the subdivision? Early phase, late phase?
  • How close will your neighbors be?
  • Is there ample privacy?
  • How might your house be oriented on the lot?
  • Are there mature trees? Or will you need to plant trees?
  • Is there a home owner’s association? What are the fees?
  • What zoning regulations, deed restrictions, and architectural guidelines are in place? For example, is a metal roof permissible?
  • What are the landscaping requirements?
  • Does the house you have in mind fit in the neighborhood?
  • Is there room for rain water collection?

Free standing land

Need privacy and space? Then you might be looking for land that’s not a parcel in a development or subdivision. Looking for land can be fun and exhilarating. But be careful not to fall in love too quickly. Don’t be tempted to purchase a piece of land without first considering the infrastructure costs to prepare it for building. You should have a budget in mind for the whole project. Keep in mind this very simple formula:

Cost of the land Infrastructure/prep costs

Cost to build the house itself

= Total Build Cost

Here are some things to consider -- some of these apply to a lot in a subdivision, too:


In the area surrounding Austin, Texas, as a general rule, you’ll find active soils east of Interstate 35 – sandy loam and clay. A soil test will help determine the kind of foundation and septic system you need. For example, many of our clients want poured slabs (instead of pier and beam) because they use the polished concrete as the finished floor. A soil test plus an engineer’s foundation plans determine how that slab should be constructed. We always engineer our slabs.

West of I-35, we grow a lot of rock. I’m talking limestone. Lots of limestone. Digging, trenching, and septic systems can be more costly.


  • How is the slope of the land?
  • Is there an obvious sweet spot for your home?
  • Building a home on a steep slope could mean extra costs for excavation, retaining walls, French drains, additional boring, or taller slabs.
  • Can the seller provide you a topographical survey?


  • Visit the lot at different times of day.
  • Where does the sun rise and set?
  • Which way will your house be facing?
  • Which direction is the view?
  • Where do the breezes come from?


  • Is there good drainage?
  • Is any of the property in a flood plain?
  • The Texas Hill Country is notorious for flash floods. Are there streams? Dry creek beds? You don’t want to locate your home in a natural swale.
  • If you’re considering a lot in a subdivision, check to see if other property drains onto yours.


  • Are there trees and shade?
  • Consult an arborist and get a tree survey to identify and tag trees. Keep as much shade as possible. Plan to surgically remove only the trees necessary for the house and driveway – this requires you work with a designer and builder to develop a site plan.
  • Will the lot need to be cleared of underbrush?
  • Plan to mulch brush and trees you remove. Use the mulch for pathways and garden.
  • If you want to clear the lot yourself, please think again and plan properly. Plan to burn? Check with the local fire marshal. At the rural volunteer fire department in the Dripping Springs area, we answered many a Sunday evening call to control brush fires left behind by well-meaning land owners who thought they had doused that brush pile before leaving for their Monday-morning jobs in the city.

Endangered species

  • Any endangered species on the property?
  • Contact the Texas Parks and Wildlife office to determine any restrictions that might apply.


  • Where should the driveway be located?
  • Is there easy access to the road?
  • The cost of a driveway is determined by distance + material. The costs for different materials increase in this order: rock, road base, asphalt, concrete.


  • In a subdivision, electrical service will be available.
  • On undeveloped land, how far is it to the point of source for tapping into the electrical grid?
  • Will you need additional poles or underground lines?
  • Are you considering a grid-tied solar system?
  • Do you want a stand-alone solar-powered house? A worthy goal that requires careful planning and design.


  • Is there municipal water, a MUD, a water district, or some other type of water coop?
  • What’s the tap fee?
  • Consider the cost to install water lines to your property.
  • Drill a well? On rural land, an alternative is to drill a well. It’s costly, of course, and you might be subjected to hard water and intermittent drought that lowers the water table.
  • Or use rain water. Instead, install a total rain water collection system. The cost can be comparable or even less expensive than drilling a well. Tanks fill quickly when it rains. If you empty your tank during an extended drought, you can purchase water to refill the tanks; you can’t do that with a well. Please check: some deed restrictions require you to tap into the MUD or water district water system even if you plan to use total rain water.


  • Can you get wired into the telephone network?
  • Or depend on cell phone service? Cell phone service can bespotty in certain parts of the Hill Country.
  • Can you get cable service, or depend on a satellite hookup?

Waste water

  • If you’re in a subdivision, is there a sanitary sewer?
  • Or must you install a septic system? A soil test and septic engineering will determine the type of system that’s right for your land – a conventional system, a spray system, or a drip aerobic system.

Land Prep Costs

A short list of some of the costs you’re likely to incur to prepare land for building:

  • Topographical survey
  • Tree survey
  • Plot survey
  • Soil testing
  • Lot clearing
  • Septic design and engineering
  • Septic permit fee
  • Septic maintenance contract
  • Utility tap fees
  • Permitting

Seek Expert Advice

It’s a lot to consider. But don’t be daunted. Getting your dream home on your dream lot is worth the journey.

You don’t have to go it alone. Consult with an experienced builder who can put together the right team of consultants and experts to evaluate the land and prep it for building your home.