Why do you want lake front property? If you are retiring in a year I assume you will be approx. 62-65 age Have you dealt with building/permits/ contractors etc? Are you by yourself? Is this in the UP or upper MI. I am familiar with MI as I have relatives there. How close will you be to medical/shopping etc. Are there any smaller towns you could live and still enjoy lakeside living. Are you south of that area? You need to list pros/cons and talk to a relator in that area, and remember that area I quite cold in the winter.

And before you consider a lot, talk to a builder. If it's that remote, it will be more expensive to build. Modulars are a good choice though - I have friends with one that they were able to customize a bit and it's really nice and being in the mountains where they are, it was far less expensive and more reliable than the local builders.

To answer this one question - "Thoughts? Questions to ask the realtor?" I think you and the realtor should find out all about the rules regarding building on that small lake. The city/county/state/ blah blah blah probably have property rules and setbacks and so on that may not have existed with the existing homes. You will want to know them before you decide to purchase property and build on the small lake.

Some of these questions are already sorted and are not my question. My problem is this issue of ending up with a small house big price. I wonder if there is some sq footage break point or something.

The square foot break point is the current average of the cost per square foot of recently sold houses. Maybe this isn't the right investment location at the moment for you. Things change, houses become available. Try to stop yourself from rushing into anything. Real estate agents will press you towards buying - that's their business.

It's always more expensive to build than buy. If you can't afford to buy an existing small home on the lake,then you're not going to be able to build there either. 8 hours away from your current friends and family doesn't sound like the smartest retirement location either. I think you've got a lot more thinking to do to get some sort of old pipe dream out of your head.

The new reality of being retired isn't going to be a full time vacation. You'll need those friends and family and medical facilities 8 hours away. So, if you want lakeside, looking closer to home would be in your best interests long term.

Whether it is risky has nothing to do with rules of thumb. It has to do with your personal finances, which only you know. Also with how much cost overruns there are. Property values and whether you can recoup the cost only come into play if you plan on selling or refinancing. Mortgage rates are pretty low right now, so you are unlikely to be able to refinance into a lower rate regardless of property value.

While my DH and I would never consider a home that remote for our retirement, we aren't you.

We happily 'overpaid' for the location we wanted. A spec builder could have put up a 5-6,000 sq ft two-story house on the acre we bought for our 2900 sq ft single story home. We did hedge a bit by building with a full-height attic that can be finished to create that larger house.

Before building anywhere, one has to look at the recently solds of the homes that your new home will be comparable to. Determine what your new home would sell for once completed. (Usually just adding up the value of the land, plus the costs of the new build will not get you the fair market value of the new home and lot)

Sometimes, a vacant lot just is not economically viable to build upon. However, usually lake front lots are.

Note to the OP... I work with lake homes quite a bit. You really need to get a RE agent to determine the FMV of your lot and of the lot and house, when finished. Lake front lots can vary in value wildly from the neighbor's lot... water quality, size of cove, visibility of the main channel, sunset/sunrise views, shallow areas, sandy beach, rip/rap, wake zones, endangered aquatic plants, Army Corps of Engineer regs...

I would advise you to do these two steps first, to be sure the lots are priced at economically feasible values.

I think Sophie summed it up well: If you can't afford to buy a house on this lake, you also can't afford to build.

You mentioned modular -- they aren't allowed everywhere. Definitely verify before you spend any money.

I will also agree with other posters who say, Be sure to plan for services. I was briefly tempted by a certain lake-front neighborhood that looked wonderful for us, but it just wasn't the right location. I wish we could move that neighborhood elsewhere ... closer to town, not across the bridge from civilization.