18 Feb 2019

Did You Know You Can Invest In Water

Many of us do not realise that water is a commodity just like oil and gold, and investment in water is a real thing. Many people have successfully invested in water, and many are planning to do so. In the film “The Big Short”, actor Christian Bale invests in water rather eccentrically.

Modern economies require lots of water. For example, to make one gallon of wine, they need 872 gallons of water. And to make just one pound of chocolate, manufacturers need 2061 gallons of water. But there is a problem: fresh water is not abundant.

Water is just like other commodities. It becomes more valuable when you have less of it. And this is exactly the case with water, because although vast regions of Earth are covered by water, there is very little fresh water.

Water investment options

There are a few ways to invest in water, and some of the ways are easier than others. Below are some great investment options:

Investing in water rights

As an investor, you can invest in water rights. This option gives you access to water from sources such as groundwater, lakes and rivers. With that right to use the water, companies and other users can use the water covered by your investment contract and pay you, if you want to learn more about the water trading process then you can visit this page to learn about water investing thoroughly.

Farmland investing

Another great way of investing in water is to buy or lease farmland. To make a profit, farmers must have access to water, especially in regions where water is scarce. All successful farmers know the importance of having access to water. If you make enough investment in farmland, you can greatly benefit from cattle farms, wineries and foodstuffs. 

Investing in water stocks

Investments can be made directly in water-related stocks. Just by selling water and wastewater treatment, some companies are already making huge amounts of money. Before considering a stock trading, you must know that those commissions are higher with stocks.

Tips for investing in water

As a water investor, you must know what you should do and what you should not. You are more likely to be successful as an investor if you know enough about the rules and regulations of investing, leasing and ownership. Here are some tips that may help you.

Know that the process may be complicated

The government regulates water rights at federal, state and local levels. You must know this information before you lease or buy water rights. Therefore, trading or buying water as a commodity is a bit more complicated than investing in other stocks or commodities. Many people start investing in water without knowing that this sector is directly regulated by the government and eventually end up finding that the process is not simple.

Know your rights and obligations

When you invest in water and land, you may attract contracts and lawyers, and that may lead to complicated outcomes. It may be really a problem when you consider buying land with a source of water. If you find yourself in such a case, consulting a knowledgeable attorney is a good idea. Just make sure that the attorney you choose knows much about land and water contracts.

Know the risks

You will need to deal with some risks when you consider investing in water. This is a supply and demand market, and you must find out who your ideal clients are. You may need to conduct a research to do so. For example, demand for water will be high if you own your water rights near a gas or oil hydraulic fracturing site. Compared to the price frackers pay, farmers pay very little.

In recent years, the demand for investments in fresh water has soared. There is enough reason to believe that the demand will continue, and investors will enjoy a host of amazing opportunities. If you do it well, investing in water can be highly rewarding.  

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