There has been some very original thinking on this subject. It does not all have to be on the ground in the middle of the yard. In fact railroads that connect two or three different areas of your yard with a single track may look more natural. You can build on the open ground, among the trees, on hillsides, along a fence, around a pool, along or even on a fence. If you are really tight for space you don’t even have to have a loop. You can simply run your train back and forth on a section of track.
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Where can I build my railroad?