Should I Buy Additional Water Rights For My Residential Lot?

COEngineer

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My HOA worked with a local water entity to offer homeowners the opportunity to purchase additional water rights. All the lots (including mine) are 2.5 acres. My lot is mostly pine trees with large openings - we have small areas of turf (seeded grass) right next to the house. We currently have 0.38 acre-feet (123823.4 gallons) allotted to us, of which we used about 50% in 2020. The new deal would double that to 0.75 acre-feet for a one-time fee of $7500.

There are no livestock allowed so it's not like we, or future owners, would be able to use the water for animals. A big garden or lots more turf is the only thing I can see requiring more water than what we have now. So, I don't think it's really worth it, but cannot help feel like I might be missing something. Water is super valuable and this would go with the property in perpetuity, so could it be a big plus for the real estate value when I eventually move?
 
i work specifically in water and water rights in colorado. that doesn't seem like a bad per acre foot price . 20,000 if i did it correctly. especially if all the headaches that can come with water rights transactions are taken care of in that. (though i'm not savvy in water rights economics, mostly just the laws and rules ;) )

i was looking at a brokerage today, C-BT units are going for like $57k-$58.5k bid/ask essentially which is roughly 73k per acre-foot (good barometer of south platte market rates).

are you in the Arkanasas or the south platte? neither? are they surface rights? coming from a well somewhere?

regardless, water value is only going up. farms are are only going to be bought and dried, homes are only going to built. seems like it could be a good investment and insurance policy for your property.
 
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With how scarce water is becoming in the Western US, and how hard fought people are over those rights, it would be hard not too look really deep into making this work. You currently don't use your current water allotment, but you never know what the future may hold.

For example, what if drought forces everyone to reduce the amount take from the Aquifer? What if its proportional to your allotment? I'm not saying anything like that is even possible, but with how the aquifers have been dwindling in certain areas, having spare allotment can't hurt.


Now, $7500 isn't a low dollar figure, so that has to play into it as well. In your eyes, is that cost worth water security for the future? Is this your forever home?


Lots of things to weigh in. I would say currently water allotment isn't a "selling point" of a property for most people. But 20-30 years down the road, having water when most people don't could be huge and could be well worth $7500 invested now.


Lots of speculation on what the future holds, but so is life I suppose
 
Who actually holds the right? You, the HOA, or are you pulling an allotment from a supplier such as an irrigation district? How senior is the actual right? What is the source of the water?

Lots of ifs. If it's a senior right (say an irrigation provider) and you will have water available during dry years, because they are in priority, it might be worth it. If it's an junior right which will be curtailed during the first dry spell, the right might not do you any good.

Lots of ifs.
 
Who actually holds the right? You, the HOA, or are you pulling an allotment from a supplier such as an irrigation district? How senior is the actual right? What is the source of the water?

Lots of ifs. If it's a senior right (say an irrigation provider) and you will have water available during dry years, because they are in priority, it might be worth it. If it's an junior right which will be curtailed during the first dry spell, the right might not do you any good.

Lots of ifs.
This and Togie's answers are the questions I would have after a career in water rights in MT. We are a bit different that Colorado but I would certainly drill down on how the water right is recorded and how senior it is in priority.
 
Additional water rights can serve to boost the resale of your property in the future if you go that route. I would seriously consider it at that price.
 
I don't even understand how that stuff works. It's not even a thing here.. These kind of questions aren't something I could even comprehend..

I have more water here now on my property than I could use in a lifetime not to mention the fact that we get over 3 ft of rain in an average year.. I don't need any special permits to irrigate up to 140 gpm. Water is a right that comes with every property and for personal and agricultural use there is basically no regulations on quantity..

My house well when drilled pumped over 100 gpm when the driller measured it.. So basically I live where water and the rights to it are taken for granted. I even have free flowing springs here on my property that produce huge amounts of water enough to start a large stream..
 
I don't even understand how that stuff works. It's not even a thing here.. These kind of questions aren't something I could even comprehend..

I have more water here now on my property than I could use in a lifetime not to mention the fact that we get over 3 ft of rain in an average year.. I don't need any special permits to irrigate up to 140 gpm. Water is a right that comes with every property and for personal and agricultural use there is basically no regulations on quantity..

My house well when drilled pumped over 100 gpm when the driller measured it.. So basically I live where water and the rights to it are taken for granted. I even have free flowing springs here on my property that produce huge amounts of water enough to start a large stream..

do you live east or west of the mississippi?

my gut says east ;)
 

yeah, different world.

colorado, the state where it wasn't legal for a residential homeowner to collect 110 gallons of rainwater until 2009. and you would've thought you were burning the lower south platte water users alive when the legislature was mulling it over (there's an interesting analogy to MOGA here i think 🤔).
 
yeah, different world.

colorado, the state where it wasn't legal for a residential homeowner to collect 110 gallons of rainwater until 2009. and you would've thought you were burning the lower south platte water users alive when the legislature was mulling it over.
When I hear people from the West talking about water it kinda blows my mind. Like it's a different world..
 
Yes. I am selling one of my properties. The water rites go back to my dad from 1950. None of the neighboring properties since developed can barely get any extra water as they now consider it “ wet lands “ and in the water shed. Neighbors use a rain watch catch basins filtration. Probably much different than your situation but it you ever sell the rights are valuable.
 
question for @TOGIE , if the HOA held the adjudicated water rights would that leave the HOA member SOL?

I mean, yeah. But I assume the water rights are the sole source of supply in what I assume is a larger-lot slightly more rural neighborhood. I’m betting there is no municipal supply. So the board members which I assume have to be residents would also be selling off their only water supply. So shooting them selves in the foot while screwing everybody. But I assume the hoa members would have to be duly compensated if so?

I’d wonder what the contracts looks like between resident and hoa with these water rights being dedicated to each property. Might be nothing to worry about. The other can of worms would be dependent how the water rights were changed and Re decreed in court for the new location and potentially new purpose of use if that was necessary.

edit: sorry I misread your post and thought you said if the hoa sold not held lol. Short answer is no I don’t think that leaves the homeowner sol. The rights would be contractually obligated to the property I assume a d therefore fully beneficial to the property value. or the homeowner would purchase shares in the water right, which is as good as a water right, likely just facilitated by the hoa. This situation overall sounds pretty standard for rural subdivisions.
 
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If you can afford them, without question I would purchase them. I think they will aid property values and secondarily, water will likely become a global commodity in the future.

I have multiple friends who have to haul water in CO, previous landowners missed opportunities to secure the rights and now they are prohibitively expensive.
 

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