H2O: The Valuable Commodity in Texas Real Estate


H2O: The Valuable Commodity in Texas Real Estate


When it comes to purchasing property, there are a myriad of factors that prospective landowners have to understand before signing the dotted line. Even though when ‘Texas’ is mentioned the majority of people think of oil being the ‘gem’ buried in the land, it is actually water that is increasing in value in the Lone Star State, becoming a much-desired commodity for land buyers and sellers.


Landowners should always consult professionals, such as the Republic Ranches team, when water rights are ‘on the table.’ Because of water ownership laws and exceptions, there are many things that need to be understood; such as the fact that the ownership and use of water actually depends on the location of the water. While most surface water is owned by the state, most underground water is privately owned, which means it can be conveyed or reserved, depending on what the landowner is looking to do.


“Water percolating below the surface of the earth”, is how groundwater is defined, with most underground water held in nine major aquifers in the State. Of the groundwater used, 80% (or 6.3 million acres of land approximately), is used to irrigate agricultural land.


Texas landowners do own the water beneath their property. (*Texas Water Code Section 36.002), but they do not only own the water that they pump from the ground – they also are the owners of the water already in place underground.


It always becomes a phrase in the Texas landowner vocabulary: Rule of Capture. This is something all buyers must understand up front, because it states that because a landowner owns the water beneath his property, they have the right to pump as much water as they wish, subject to local Groundwater Conservation District Rules, if any.


Many parts of Texas are known for “perpetual drought with periods of flash flooding”, which makes  the water component of joining of the prospective landowner with the right property a key piece of the puzzle.  Certain parts of Texas are a good fit for the recreational buyer but a poor fit for someone interested in raising a commercial crop; regardless, the water resource is always important.


When it comes to a recreational purchase, the prospective landowner is most definitely looking for those streams, ponds, underground water, rainfall, etc. that are rich for fishing, and an environment that can provide the necessities to plant food plots that will enhance the white-tailed deer and other wildlife populations for the avid hunter.  The buyer interested in a commercial farming operation, in addition to appropriate soils, needs adequate rainfall, surface water rights, groundwater potential/rights or some combination of the three to be successful.  With that in mind, it is a high priority for any prospective landowner to make sure the water resources available to a particular property match their goals and objectives for the property.