The finishing touch, and the part that changes a train set into a model railway.
Take time to work out the position of buildings, their access not only by rail, but by road too. Also add tiny incidental items, especially on an exhibition layout, as it gives spectators more to look at if nothing is moving at the time they visit. You cannot always have trains moving.
Lots of Options here!
Golden Rule 5 - Keep it real.
As part of the original planning you should have a concept of why the railway exists. To serve a quarry, dockside or brewery or as a passenger route to or from a town, or even a preserved railway for example.
Also you should have planned the buildings, roadways, bridges and general lay of the land. Some of this can be constructed as you go and may be dictated by cost or ability, but to have a basic idea of what you are trying to achieve helps a lot.
Landscape construction methods are varied but fall into a few main categories.
Hollow formed hard skinned or solid foam treated with scatter materials, paint and natural items like trees.
Using card formers to shape the land filled between with crumpled newspaper then covered with plaster soaked cloth or papier mâché is cheap but messy and takes a long time to dry. It's also fragile and difficult to 'plant' items into.
Another popular option is to carve builders insulation foam or polystyrene packing to shape then coat in plaster, or just sand smooth, paint and cover with grass mat or other scatter materials. A variation on this is builders aerosol expanding foam which is quick easy to shape afterwards and is cheap. You get a lot of foam from one can for a few pounds, almost too much and control is impossible, but you can keep and use the offcuts elsewhere on the layout. It carves easily and sands to shape well.
Once the landscape is formed it can be covered in 'grass' by sprinkling mixtures of scatter material onto areas of wet PVA glue as you like to achieve a natural effect. 'Static grass' is a variation where long fibres are dropped onto the glue through a statically charged sieve so they stand upright and look much more like real long grass.
Buildings can be made from many plastic or printed paper and card kits, or can be scratch built following similar lines, or purchased ready made second hand for less money.
Trees and foliage can be bought, or even home made, but are more of a challenge to look realistic, or even to the correct scale. A trip to your local model shop or to an exhibition and check out the trade stands is well worthwhile, and even look at the layouts at exhibitions for ideas for what to do, and sometimes what not to do! See our Exhibitions detail pages.