I have done it for years. It often starts out as a small house or apartment in a village they cleared of some evil. It then often progresses to space in a city, a warehouse that was infested by undead, then lands on the border with some "civilized monster" the heroes made friends with.
Supplements to look into:
XRP's Magical Medieval Society:Western Europe has a very robust, and probably overkill, system for constructing....anything. Roads, fortresses, temples, dungeons, farms, etc. It was for 3e but its easily adapted to other editions/systems as it is more guidance on how magic/items would impact construction. I think Drive-thru has just the building system chapters as a separate pdf but the whole book is awesome.
Tome of heroes - fairly simple system targeting estates that generate profit/loss as well as plot ideas from complications. It is probably worth it for a fairly rules-light approach.