.- long term: there is a shortage of properties in almost all cities and in some cases and that has contributed to an increase of rents and prices in double digits in some cases. i.e Mafra 10% rent increases last year and Setubal +15% price increase.

The tenants pay all utilities including sewer and garbage. 

From what I can tell, the extra equity on the house could be utilized to provide better ROI.  

Utilizing empty lot space in this way helps to combat the increasing housing prices and limited supply many markets have been experiencing.

Several have mentioned utilizing low down payment second home loans for qualifying.

Quote from @Jacob Sherman: you can utilize no income no doc construction loans . fund 50% of the land 100% of construction upto 65% ARV .

Unless a different one would be better that you could suggest   If you are house hacking you can utilize 3-10% down. 20%+ is great to put down but not always possible.

BUT, get a solid quote on utilities.

This way you can utilize the leverage if you plan to scale up in the future.

Tenant handles all utilities and lawncare.