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Space limitations are always a consideration when adding buildings or structures to a layout. Scale model 3D buildings are popular, or you could use low relief buildings which are thinner and get positioned against the background. Both have their place, and most layouts have a mix of both 3D and low relief buildings.
If you are using 3D buildings keep in mind that they’ll require more space. If you are going to position buildings between tracks you’ll need to allow not only enough room for the structure, but also for the roadbed, maybe a fence, or perhaps a road or path leading to the building.
A building cramped up against a track won’t look natural, unless it’s maybe a factory or warehouse backing onto the tracks for freight to be loaded or unloaded. The problem with warehouses is, they’re usually large, so making them as low relief structures will use up a lot less space (and be cheaper) than will making them in 3D. That way you’ll only lose a couple inches at most by positioning them against the background. You’ll then have room for more tracks and maybe a signal box, telegraph office, train station, goods depot or something like that.
Shops and houses are usually set back from a railway line because they need road access, sidewalks and room for scale sized vehicles, people and animals to complete the scene.
As an example, these are some of the 3D house models you can download plans for. As you can see they look just like real houses.
Or if you want to use less space, you can make your shops and houses as low relief structures. Here’s some more examples of plans you can download.
You can download the plans for these and other buildings at The website features several step-by-step tutorials to walk you through the construction process.
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