I changed my mind on this after buying a parcel years ago where the paper water rights looked solid — senior priority, decent acre-feet, everything you'd want. What I didn't investigate hard enough was the delivery infrastructure between the ditch headgate and my fields. Turns out the previous owner had been patching a deteriorating pipeline with wishful thinking for a decade. Replacing it cost more than I budgeted for the entire first year of operation.
Now I treat on-farm delivery infrastructure as a deal condition, not a post-closing project. I want to walk every inch of lateral ditch, every pipe segment, every headgate structure before I make a serious offer. A water right without functional delivery is just a piece of paper with a priority date on it.
Real estate listings almost never disclose infrastructure condition, and most buyers focus on the decree itself. That's backwards. The right gets you in line. The infrastructure is what actually gets water to your crops.
Anyone else found that infrastructure condition was the sleeper issue in a purchase they thought they'd evaluated thoroughly?