Forest Wonder, Mercer

How Do You Stake Your Claim in the Northwoods? The First Baby Step

There’s just something different about a log cabin. I’ve always dreamed of living in one, and as of 1999, I have a log home that I and many others built. It was a dream of ours that we thought we would never realize. The story about how we got here is pretty interesting. Did we take the traditional route of ordering a turn-key log home package for 100′s of thousands of dollars? Not at all.

We built a 4,000 sq. ft. log home on a 1.5 acre lake lot on a $160,000 mortgage. I’m serious. How did I do that while both of us were working full-time 200 miles south of here? You can get that whole story in the Offers Vault. Because on that page is an offer that promises to send you the 42-page story/blog in an ebook for FREE if you simply request it. If you follow my advice on tips and pitfalls, you can have a log cabin on a scenic Northwoods lake for a pittance.

I’ve had so many people ask me the title question above. There’s  a lot to be taken into consideration. How do you find and evaluate a waterfront lot. What should we plan on spending on a lot? How do we know that the lot is buildable? How big should the lot be in order to maintain privacy? And more…

I was a real estate broker and managed a Coldwell Banker franchise in a previous life. So I feel that I can offer intelligent advice on this topic. Additionally, my experience with building in the Northwoods has taught me much.

People’s biggest concern when thinking about building in the Northwoods is that it cost a fortune. That’s simply not true. Especially now that the lengthy recession has brought Northwoods property levels to their lowest level in decades. This post is primarily focused on getting a lot. I have other tricks up my leave for building a house or cabin. But I’ll share those in future posts.

Do what I did. Approach the building process with baby steps. Find a lot you like, buy it, and then forget about it for five years or until you are ready for the next step. We bought our lot in the Northwoods in 1994 and didn’t build anything on it until 1999. This gave us plenty of time to plan and save.

It’s OK to move slowly with an important decision like this. Once you have purchased a lot, you have staked your claim in the Northwoods on your favorite lake and that’s all you need for now. If you change your mind later, sell it. But remember this, water frontage is a scarce resource. God isn’t making anymore. And that’s what makes it a valuable investment.

A couple of words on lots to help you find a good one – are they expensive? No, not now. The Great Recession took care of that problem. Thousands of Northwoods lot owners abandoned their plans and downsized their assets in order to prepare for the economic and financial turmoil. The market is glutted with lake lots. As a Realtor at the time, I couldn’t sell a lake lot to save my life. No one was building during the recession. Construction as we knew it didn’t exist anymore. Companies tanked. So no one wanted a lake lot. Prices plummeted as owners were desperate to unload unnecessary assets and consolidate their financial situation. This is the best opportunity in decades to acquire a lake lot at clearance prices.

Lot Criteria

But what to look for? Take a fall road trip through the Northwoods when it’s in breath-taking full color. Look at many lots and then look at some more. Here’s the criteria that I feel is important.

  •  You must like the lake where your prospective lot resides. I recommend you acquire a lot on a lake that is at least 300 acres in size. Why? Because you want to feel like you are living on a lake, not a pond. You want to have sufficient area to ski, tube, take pontoon trips, and fish.
  •  A flowage would be perfect (see my post on “What is a Flowage) but lots on flowages are difficult to find. This is because in the 1990’s, the State of Wisconsin purchased all the available land surrounding the big flowages in order to preserve them as wilderness areas. There is still private land on flowages, but not much. This decision included the Rainbow, Willow, Chippewa, Turtle Flambeau, and Gile Flowages.
  •  Look for high ground with a gradual slope to the lake. Too steep means you’ll need steps. Avoid that. Too flat means standing water when it rains avoid that. If there is any standing water on the lot, avoid it. It’s probably not buildable.
  • Lake content on the frontage. Avoid weed or muddy frontage at all cost. The lake content on your frontage should be sand, gravel, rubble, but not mud, clay, or silt. Sand grass is OK for weeds. A few reeds are OK. These weeds grow on sand. Avoid other weeds completely. Don’t let anyone tell you that you can manage the weeds and clear them. You can’t. That would require DNR permits and chemicals, as well as physical effort raking them out of the water for disposal.
  • Your lot should have a minimum of 200 feet of water frontage. Any less and you are sacrificing privacy and inviting your neighbors to build too close to you.
  • The site you choose for your future structure should be at least 75 feet from the high-water mark (law) and 30 feet from any of your property lines. How do you find the high-water mark? Note the frontage bank and material such as drift wood. The high-water mark will be obvious. If you have hesitation, contact the nearest WDNR station (Wisconsin Department of Natural Resources) and ask them to show you where you can build. They’ll help you for free. Your lot should be approximately 1.5 acres in size; 200 feet wide and 400+ feet deep.
  • Check to see who plows and maintains the access road to your lot. Your Realtor can get this information for you. You don’t want to plow and maintain it yourself. You can always find someone to plow your driveway. But a road is a different matter. I pay $150/season for someone to plow my driveway. Plowing the access road is a shared expense between twelve neighboring lot owners. That comes to about $50/season for my share.
  • Have your Realtor get a copy of the property taxes for you. The taxes will show an amount just for the lot. Also have your Realtor get statements for neighbors nearby. Tax statements are public records. You can check on anyone who pays property taxes in your area. This will give you an idea what your taxes will be once a house or cabin is built on your lot. Taxes can vary widely. Some townships are notorious for high taxes. Try to avoid these. You would like your taxes to be somewhere around the $3,000 mark or less once your structure in complete. It’s dependent on square footage. So if you want to build a 4,000 sq. ft. house, expect to pay much more. My house is 4,000 sq. ft. and I pay $7,000 annually.
  • You cannot build in the electrical power right of way, if there is one. If there are power lines running through your lot, you’ll usually see a cleared area under the lines like an alley through the brush and trees. Stay out of this alley with any structures, trees, or shrubs.
  • When planning the location of things on your lot, realize that a well needs to be on the lake side of the house and a septic system/drain field needs to be located somewhere between the house and the road. Septics are never placed on the lake side of a home for obvious reasons. To the side of the home is often acceptable. Your septic installer knows best.
  •  You want a nicely treed lot so take that that into consideration when you plan the footprint for your house or cabin. But try and remove as few trees as possible. They’re an asset to your property.
  • The Department of Natural Resources does not want to see your house or cabin from the lake. So if you plan on clear-cutting a “view” of the lake, don’t do it. The DNR permits a “viewing corridor” but check with them to see how wide it can be. I think it’s 30 feet. We didn’t cut anything between our house and the lake. You can’t see our house from the water and that’s the way we like it. We have a small natural opening that allows us to see the lake and that’s fine with us.  We have a nice natural path (made by wildlife traffic over decades) through the woods and down to our dock and beach. That works for us.
  •  Lastly, once you have decided where to put the cabin or house, now you need to know where to put the septic tank and drain field. Why? Because that area will need to be cleared and the soil there must percolate. If you are convinced that you have found the perfect lot, get a local plumber to come out and do a “perc  test” before you buy the lot. He will help you decide the best location for your drain field. And he will test the soil to insure that a conventional septic system is allowed. A perc test will run about $200-$500. He may say a mound system is necessary if the soil does not percolate well. That’s not a show-stopper but realize that a mound system cost about three times as much as a conventional septic system. However, it’s a one-time cost. Once installed, a mound system requires no more attention than a conventional septic. If your plumber suggests a holding tank, look for another lot.

Negotiating a Price

So now you have approved your lot and so has your plumber and the DNR. It has everything you expected. Nice trees, good sand frontage, no weeds on the shoreline, a nice level spot to put the house or cabin and an area for your septic and drain field. The property taxes look acceptable. It’s time to negotiate a price.

My lot is as I described it above. 1.5 acres, 200 feet of frontage, nicely treed, and conventional septic system. I paid $60,000 for it in 1994. You won’t find prices that low. You should shoot for no more than $1,000/foot of frontage on a quality lake of 300 acres or more. I’ve also seen some nice lake lots for $150,000 but these are rare and require a thorough search. If these prices sound high, consider this. My lot’s tax assessed value today is $204,000. I’ve more than tripled what I paid for it. And your lot will do the same the day after you build something on it.

Offer the seller 10% less than what you know the lot is worth. Negotiate from there. Once the deal is done, go home. Your investment is safe. You now have your foothold in the Northwoods and you don’t have to do anything more for the next 5-10 years except watch your investment increase in value. Remember, water frontage is a scarce resource and no more is being created. Good luck!

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