I’ve been testing with DEM data from OpenTopography.org and other sources, downloaded as GeoTIF height maps, then edited using GIMP or World Machine. GIMP has the advantage of being free, but World Machine is a purpose-built terrain editing tool rather than a general image editor. World Machine directly supports tiling its output into the pixel dimensions that are supported by UE4.
One option I’m looking at is to use a Python script and the ImageMagick open source command line utilities to take care of the tiling, for projects where all I need is the raw heightmaps retiled and imported into UE4 (that is, if I plan to do any additional landscape work using UE4 native tools).
World Creator, a tool which is available either as a Unity plugin or as a standalone product, can do many of the same things as World Machine. I’ve used the Unity version of World Creator and like it, but the standalone version is quite a bit more expensive and I haven’t tried that yet.