@Collin Brown, IRS Publication 523 addresses this quite nicely - Vacant land next to home. 

So my wife and I just landed a nightly rental approved condo in a resort area.

It's around 4 acres of land that could be developed into a cul de sac with ~10 SF homes.However the lot currently hosts a 5k sqft commercial/industrial structure (made out of metal). 

I am curious how the current leadership will manage the lands, development, etc. and have some genuine concerns.

I've dabbled in the new construction space here in Chicago and there is A LOT that goes into it...I'd highly suggest spending some 1:1 time networking with some other investors like @Jennie Berger or @Prashanth Mahakali who are both Chicago developersYou make your money with the land purchase and then systems/processes/volume over time in the development game, but it's not easy and competition is high!

We’re looking to remodel our small kitchen (about 12 x 12, L-shaped), and convert the garage into 2 bedrooms (not an ADU, no added bathrooms or kitchen, just adding bedrooms to the house).  

I need to figure out a base operating cost so I can consider this when I assess land purchase price, but I"m finding it very difficult to asses things like insurance, property tax, utilities etc. on something that isn't build yet.

As a first-time buyer putting less than 20% down, it was a struggle to land a property in this area. 

Immerse yourself in learning about land investing.

Not even bare land for $100k.