When you are planning on building your dream home, one of the most important aspects to consider is the location. This is after all where you’ll be spending most of your time, and you need to carefully decide where that will be.

But what exactly are the differences between the two – besides the location? Is the one more expensive than the other? Or is the one easier to build on than the other?

There are many variables that come into play when deciding. You’ll need to think about proximity to schools, hospitals, and shops, as well as the accessibility of utilities like water and electricity.

Read on for the advantages and disadvantages of each.

Building on a city lot


  • Power, water, and sewer systems are already in place and readily available.
  • General infrastructure like designated streets and city services have already been built up, and flood zones and hidden conditions have already been considered.
  • The feeling of living in a community.
  • Often easier to resell
  • Homeowners Associations (HOA) that ensure that design guidelines and cleanliness restrictions are adhered to. This in turn helps to maintain home values and appreciation.
  • Usually closer to amenities and popular school districts.
  • Comparable properties are easier to find in a good economy which means lower down payments.


  • Building permits in a city are usually very expensive.
  • Lots are generally priced higher per square foot due to more pros.
  • The lot could be part of a Homeowners Association (HOA). While this could also be an advantage, this generally means that there are more rules and restrictions when it comes to the design of your home. It mainly depends on the HOA itself. It is important to do enough research before settling on a lot within an HOA.
  • HOA may restrict your choice of who will build your home.
  • Annual HOA fees also need to be added to the rest of your bills.
  • There could be restrictions on the type of house that you would like to build from the City. You’ll need to consider zoning regulations and any environmental issues such as water running through the property. A good idea is to speak to neighbours in the area to check the drawbacks.
  • Your options are more restricted geographically.
  • Less privacy due to the proximity of neighbours.
  • Less options when it comes to amenities. Any upgrades will need to be out of pocket.
  • Availability of lots is limited.\




Building on an acreage lot


  • Less noise from cars and other people.
  • The peace of ‘country living’.
  • Larger areas of land for less costs.
  • More freedom when it comes to what you are allowed on the property.
  • More options of different areas.
  • More privacy – neighbours are further away.
  • You have the option to install or build more eco-friendly options such as solar panels, rain barrels and vegetable gardens.
  • You have more space and freedom to plant trees and be creative with your garden.


  • More preparation and work because of raw land (removing trees and landscaping).
  • Although lots may have lower initial costs, costs for circumstances surrounding the build might end up being the same. Additional infrastructure will most likely incur additional expenditures.
  • More preparation when it comes to protecting your home. For example: if your lot is below the floodplain, you will need to elevate it.
  • If there are wetlands on your property, chances are that you will only be allowed to build on the lot after a very expensive mitigation process.
  • Landowners that are less than truthful when it comes to defects on the lot, old debris that has just been covered and not removed, and old waterways. You should speak to neighbours about the history of the land before you consider it.
  • Access to utilities isn’t always readily available. You’ll need to confirm if power, water, and gas lines are available on the lot. If they aren’t available, how accessible are they? Verify if a city sewer is available or whether you’ll need to make use of a septic tank.
  • Comparable properties may be hard to find for fair appraisals, which means larger down payment requirements.


Each of the options have many advantages and disadvantages. If you have a hard time deciding, the best option is to speak to a custom home builder. By communicating your lists of wants and needs, we can help you decide which lot will be better for the type of house you want to build.