Not all preretirees are interested in buying an existing house, especially a dated ranch or bungalow. If you want to build, David Weiner, a New York City architect known for his glass-walled weekend retreats in the Catskills and the Berkshires, says the first and hardest job is finding the land.

In remote southern Colorado, where Weiner has also designed custom homes, people will pay a premium for building sites where there will be 320 sunny days a year to power their off-the-grid solar units. In the East and Midwest, you'll pay a premium for proximity to skiing and hiking trails, good roads, and beautiful vistas. Land becomes less expensive about a three-hour drive from a major city. The farther you go, the more land you can get for less.

Some architects will design second homes as small as 1,500 square feet. Weiner says most of his clients prefer a smaller weekend place anyway, because the cost of construction keeps creeping up -- especially in rural areas, where the climate can require that the construction withstand storms, floods and wind. The total cost to build can easily reach $250 per square foot; combined with the cost of the land and the architect's plans, you could be looking at $750,000 for even a pocket-size luxury home in a high-cost region such as New England.

Weiner says you should budget for a 10-percent to 15-percent overrun in building costs because something will go wrong, whether it's a drainage problem or new regulations that magnify the cost of installing utilities. Fortunately, once you've acquired land, no one can outbid you. If you decide not to go ahead with the project, you should be able to sell the tract for a profit.

If you're not ready to cash in your current house, or if you don't want to or cannot borrow enough against your equity to swing the deal, you may have to negotiate a construction loan with a bank. You can eventually roll the balance into a 15-year mortgage or even pay it off if you profit enough from the sale of your primary residence. To defray the costs of maintaining two homes, you may be able to rent your lair to short-term visitors. Insiders say the rental business is booming in most places, citing a high volume of bookings and rising rents at HomeAway, Vacation Rentals by Owner, Airbnb and other agencies. In a survey by the National Association of Realtors last year, three-fourths of vacation-home buyers said they expected rents to cover at least half of their mortgage.

(Jeffrey R. Kosnett is a senior editor at Kiplinger's Personal Finance magazine. Send your questions and comments to And for more on this and similar money topics, visit