Buy Land Now or Wait???

Question

We make 165k a year and have no loans except a mortgage. Our mortgage is $3300 a month. We save about $32000 a year in retirement, stocks, college funds, and other investments. We basically live paycheck to paycheck but this is after all savings. We have a good nest egg saved up as well for emergencies.

My main questions is we want to buy a plot of land for 150k and then build a lake house in 5-10 years. This is our dream to own a lake house but as prices are skyrocketing it seems hard to do. We have found a small lake that was just created and people are just starting to build on it so land is still fairly cheap. The problem is these lots wont be cheap for long and they are being built on very fast. We are wondering if we could buy the land now and then wait to build in 5-10 years. There has been a crazy rise in property value in this area due to the lake and more homes being built. The land we ware looking at purchasing in around 150-180k. We have done research and building a home in 2025 would cost about 400k. But, new fully built homes on similar lots are going for 700-800k. This is over 150k more than the land and construction cost combined. This is why we want to hold the land because it will only go up in value. If we build in 5-10 years the construction cost might be 500-600k but we would have gotten the land cheap compared to what we would have to pay when all of the lots are developed in the future. We assume in 5-10 years all of the lots will be built on or will be planned to build. We also assume a already built house will go for over 800k. I'm wondering what your thoughts are and if this is possible. I know it is best not to take on new debt but i think this would make the most financial sense because in 5-10 years when we might be ready to buy a lake house it will be way out of our budget because the area has blown up and everyone wants to be there.

I am thinking of this as almost an investment opportunity and worst case we have to sell and take the profits.

Let me know your ideas

Lauren Robins · Answer

Hi David!

You're in a strong financial position. Earning $165,000 per year with no debt besides your mortgage, saving $32,000 annually, and having an emergency fund in place means you're managing your finances responsibly and aggressively investing in your future. While it feels like you're living paycheck to paycheck, the key difference is that it's after savings—so you're essentially living lean by choice to build wealth. That puts you in a better place than most.Your idea to purchase land now near the newly created lake and wait 5–10 years to build a home on it makes a lot of sense—both from a lifestyle and investment standpoint. You’ve identified an area that’s currently undervalued but clearly on the rise, with comps already selling for significantly more than the sum of the land and construction costs. Locking in a lot at $150,000–$180,000 today could be a strategic move that allows you to enter the market at a far more affordable point than waiting until everything is built out and much more expensive. Even if the cost to build goes up to $500,000 or more in the future, you’ll still likely come out ahead versus trying to buy a fully developed lake house later.This also gives you flexibility. If your plans or finances change, or if you decide not to build, you can likely sell the land at a profit as the area continues to grow. That’s the beauty of it: while it’s a personal dream, it also functions as a long-term investment. Your downside risk is relatively low, especially if you do proper due diligence and confirm the land is buildable and zoned appropriately.Of course, there are some considerations. Land loans tend to have higher interest rates, shorter terms, and stricter requirements than traditional mortgages. You'll likely need to put 20–30% down and face a higher monthly payment—potentially around $1,400 a month on a 15-year loan. That’s a real cost to your cash flow, so you'd want to be sure it fits in your budget without disrupting your retirement contributions or daily living too much. Alternatively, if you have strong equity in your current home, using a home equity line of credit (HELOC) might be a more affordable way to finance the purchase with lower interest.You'll also need to consider carrying costs like property taxes, potential HOA fees, and possibly insurance. These might be minimal now but could increase as development continues around the lake. And before you buy, it’s critical to verify that the land is indeed buildable—check for access to utilities, road access, zoning restrictions, and whether it passes a soil or septic test, if applicable.All that said, if you can comfortably manage the upfront and ongoing costs, this could be a great move. It aligns with your current savings mindset and gives you an inflation hedge while setting the foundation for a long-term dream. It's the kind of purchase you’re likely to look back on with gratitude in 10 years. Even if you don’t end up building, the appreciation of the land could make it a worthwhile investment on its own.Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.