Buying land to build a custom home in Tennessee is an exciting opportunity, but it comes with its own set of challenges. While owning land provides freedom, space, and customization, the process of purchasing and preparing a lot for construction can be more complex than buying a move-in-ready home.

In this guide, we’ll explore the pros and cons of buying land for a custom home, covering everything from costs and zoning laws to financing and utilities.

Pros of Buying Land to Build Your Home

1. Full Customization & Design Control

Building on your own land allows you to create a home that fits your vision—from the floor plan to materials, finishes, and energy efficiency.

Customization Benefits:

  • Choose your architectural style and layout.
  • Select premium materials for longevity and sustainability.
  • Integrate smart home technology and green building features.

Best For: Homebuyers who want a one-of-a-kind home tailored to their needs.

2. More Privacy & Space

Unlike pre-developed subdivisions, buying land means you can find a spacious lot away from crowded neighborhoods.

Advantages of Larger Lots:

  • More distance from neighbors for peace and quiet.
  • Opportunity to add guest houses, barns, or hobby spaces.
  • Enjoy natural surroundings, including wooded or waterfront properties.

Best For: Those who value privacy, large outdoor spaces, and scenic views.

3. Potential for Long-Term Investment Growth

Land in high-growth areas like Williamson County, Murfreesboro, and Mount Juliet is increasing in value, making it a smart investment.

How Land Value Grows:

  • Scarcity of available lots in high-demand areas increases resale value.
  • Development in surrounding areas raises property values.
  • No immediate depreciation like older, pre-built homes.

Best For: Investors or homebuyers looking for long-term appreciation.

4. Lower Property Taxes on Undeveloped Land

Until you build a home, property taxes on raw land are lower than on developed properties.

Best For: Buyers who want to purchase land now and build later while keeping costs low.

Cons of Buying Land to Build Your Home

1. Zoning Laws & Building Restrictions

Before purchasing land, you must research zoning laws, building codes, and land-use restrictions to ensure you can build the home you want.

Common Zoning & Legal Considerations:

  • Residential vs. Agricultural vs. Commercial Zoning – Make sure the lot is zoned for single-family homes.
  • Setback Requirements – Local codes may limit where you can place your home.
  • HOA Restrictions – Some communities enforce design and landscaping rules.

Tip: Check with your county’s zoning department before buying.

2. Cost of Utility Hookups & Infrastructure

Undeveloped land may lack access to essential utilities, leading to extra costs for installation.

Utility Costs to Consider:

  • Septic System Installation: $5,000 – $20,000 if sewer connections aren’t available.
  • Well Drilling for Water Supply: $5,000 – $15,000.
  • Electricity Hookups: $2,000 – $10,000, depending on distance from power lines.
  • Driveways & Roads: Gravel driveways can cost $5,000 – $10,000+.

Tip: Always ask the seller whether utilities are already available or need installation.

3. Higher Financing Challenges

Getting a loan for raw land is more complicated than securing a mortgage for a house.

Loan Considerations:

  • Lenders require larger down payments (20-50%) due to the risk.
  • Interest rates on land loans are higher than traditional home loans.
  • Some banks require a construction timeline before approving financing.

Tip: Consider a construction-to-permanent loan, which covers both land purchase and homebuilding.

4. Longer Timeline to Move In

Unlike buying an existing home, purchasing land means you’ll go through the entire building process, which can take 12-18 months or more.

Factors That Extend the Timeline:

  • Permitting Delays – Some counties take longer to approve new builds.
  • Weather Delays – Rain and winter conditions can slow down site prep.
  • Supply Chain Issues – Custom materials may have long lead times.

Tip: Work with a local builder familiar with your county’s regulations to streamline the process.

Is Buying Land Right for You?

Factor Buying Land to Build Buying a Pre-Built Home
Customization Full control over design Limited to existing options
Timeline 12-18+ months Immediate or within weeks
Privacy & Space Larger lots, fewer neighbors Often in denser neighborhoods
Upfront Costs Higher due to land prep Lower, but includes resale markup
Financing Requires larger down payment Easier traditional mortgage
Long-Term Value Land value appreciates Depreciation depends on upkeep

Buying land is best for:

  • Buyers who want total design control.
  • Those looking for space, privacy, and long-term investment potential.
  • Homeowners who aren’t in a rush to move in.

Buying a pre-built home is best for:

  • Buyers who need a faster move-in timeline.
  • Those who prefer a structured community with amenities.
  • Homeowners who don’t want to deal with zoning or infrastructure setup.

Final Thoughts

Buying land in Tennessee can be a smart investment and an opportunity to build your dream home, but it requires careful planning. By researching zoning laws, utility access, and financing options, you can avoid unexpected costs and delays.

Thinking about buying land in Tennessee? Contact us today to find the perfect lot and start planning your custom home!