If you’re investing in a real estate development project, it’s essential to understand precisely how much everything will cost throughout the project’s timeline. Although the purchase of the land and your project’s construction certainly account for a significant portion of your investment, don’t forget there are many potential costs related to site preparation. The land that you purchase often requires a lot of work before construction can begin. You must account for the potential building site preparation costs so that you can adequately budget for your entire project and accurately predict your potential ROI. With that in mind, the following is a breakdown of all the possible site preparation costs:

Land Survey

Before closing on a parcel of land, a land survey must be conducted. A land survey determines the exact boundaries to differentiate it from the surrounding parcels. The boundaries are used to ensure that anything you build – from the building to the fence lines. To have a land survey performed, you will need to hire a certified surveyor.

The average land survey costs between $500 and $1,000, but that can vary based on the size of the lot, the terrain, and the geographic location. For instance, it can cost more if the lot has more than four corners and is covered in trees. It is necessary for property developers in Denver to pay for land surveys to avoid potential legal disputes with surrounding landowners.

Land Excavation

Whether the land has been used for construction previously or not, there’s a good chance that it might require some excavation work. Not only will you have to pay to have your land cleared, but you will need to pay for a permit to do so. Permits for land excavation typically cost between $100 and $200. Standard land clearing work includes the following:


Unused land is often full of vegetation, such as plants and trees. Much of this will need to be cleared to begin construction. It can cost anywhere from $1,000 to $5,000 to clear a one-acre lot with little to moderate vegetation. If the land is not level and tree removal is required, it could cost upwards of $6,750.


Some lots may not require any earthwork, particularly if they were purchased shovel-ready or had been previously leveled but not built on; however, most often, the land will require some earthwork. This can be expensive, depending on the amount of work that’s needed. The following are some of the different types of earthwork you may need to pay for:


If the land isn’t level, meaning that it contains various slopes across different areas of the lot, then leveling is required to construct your foundation on a flat surface. Leveling often involves the addition of dirt or gravel and can cost upwards of $2,500 for a 1,000 square foot lot.

Grading and Re-Sloping

Grading and re-sloping are slightly different from leveling. Whereas leveling provides space for your foundation, grading and re-sloping are required to ensure that the land slopes away from your construction. If it doesn’t slope away, the risk of flooding is high: rainwater will run down your property towards your building’s foundation, where it can cause severe damage. The cost of grading varies based on the size of the lot and how much work is required.


If the soil is weak, it can cause stabilization issues. Your building’s foundation may not have the support it needs even if the land below it is level. Stabilization is a process in which the soil is strengthened so that it will support construction. The cost of stabilization is typically around $20 to $43 per square foot.

Erosion Control

Although grading will help protect your construction against flooding, you will need to take steps to prevent the rest of your land from flooding. If water collects on the ground every time it rains, it will result in soil erosion, leading to all sorts of problems. You will want to implement erosion control methods like building retaining walls and implementing the appropriate site drainage. Site drainage typically costs between $1,000 and $5,000 to implement, while retaining walls costs anywhere from $20 to $50 per square foot.

Permitting and Fees

There are many rules and regulations governing land use throughout Denver. Various permits will need to be obtained to construct your building and the preparation of your land. The following are a few of the permits and fees you can expect:

● Percolation (Perc) Test – You will need to pay $200 to $500 for a perc test, which tests the soil to ensure it is suitable for building and drain field installation.

● Site Development Plan – Site Development Plan (SDP) reviews vary in cost based on the project. For a one-acre site development plan review, the fee is $500. If it’s more than one acre, it’s $2,500 plus $500 for every additional acre. You can find more extensive information about site development fees in Denver on Denver’s official website.

● Asbestos Inspection – If your land has an existing structure that you’re planning to demolish, you will need to schedule an asbestos inspection before demolition—an inspection costs around $1,500. If asbestos is discovered, you’ll have to pay to have it safely removed, a process known as asbestos abatement.

● Building Permits – A building permit is required for any construction you’re planning. The cost of the permit is based on the cost of the work. A breakdown of the building permit costs in Denver is available on the city’s official website.

Underground Utilities

Underground utilities, such as gas, water, and electrical, require utility lines to be installed and connected between your construction project and existing utility lines. You may also need to install an on-site water and septic system if municipal water and sewer lines are not available near you (which is sometimes the case in more rural areas).

Utility Line Installation

The cost of utility line installation will vary based on the work needed to be done; however, expect to pay roughly the following per unit:

● Gas line installation: $200 to $500

● Waterline installation: $1,500 to $2,000

● Electrical line installation: $800 to $1,200

On-Site Water Well and Septic System

Installing on-site water well and septic systems can be expensive. If municipal water is not available, then you will need to build a well on-site. Doing so will typically cost upwards of $1,000. If you need an on-site septic system, expect to pay as much as $3,000 on top of excavation and installation costs.

Access Road

If you’re building a new multi-unit townhome, duplex, or single-family development project, you will also need to build an access road. The cost of an access road depends on the length of the road and the material you use.

The Costs of Site Preparation in Denver Will Vary

Your building site preparation cost will vary based on the land you’ve purchased. Not all sites are the same. For instance, your land may already be level and cleared, in which case you won’t have to pay for excavation or earthwork. However, any property developer in Denver will tell you that it’s helpful to keep these potential site preparation costs in mind as you seek out the land for your Denver real estate project. Once you find a site, analyzing the potential preparation costs will be essential to determine your project’s financial feasibility.