Drill well today or drill well later?

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miamivice
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Drill well today or drill well later?

Post by miamivice » Sat May 11, 2019 8:18 pm

My wife and I purchased some acreage in the country that we plan on building our forever home in a few years. I would like to do build in about 4-5 years, but it might be as long as 15 before we build.

I have the option to bring electric to the building site as well as drilling a well today, or waiting until the start of construction to build. Of course, the cost to drill a well and run electric later is more than what it would cost today, but I don't know the annual rate of increase of construction costs. Total cost might be $50k or so.

So, I will put it to the Bogleheads: Should we drill a well and run electric today, or wait until we build a house in the future?

In other words, does money in the stock market appreciate faster than the rate of increase of construction costs?

sport
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Re: Drill well today or drill well later?

Post by sport » Sat May 11, 2019 8:20 pm

There is always the possibility that the markets will show losses over your time frame. The increased future costs are more of a sure thing. Bird in the hand...

Jack FFR1846
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Re: Drill well today or drill well later?

Post by Jack FFR1846 » Sat May 11, 2019 8:25 pm

If you run electric, would you establish a service? And pay a monthly minimum service fee for nothing?
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FrugalInvestor
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Re: Drill well today or drill well later?

Post by FrugalInvestor » Sat May 11, 2019 8:41 pm

A lot of things can change over time, especially if it turns out to be 15 years. I'd wait until the project is a definite go.
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Boglegrappler
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Re: Drill well today or drill well later?

Post by Boglegrappler » Sat May 11, 2019 8:41 pm

My water comes from a well. If I were in your situation, I think I would drill the well when I needed it, and not before. Especially not years before. I'm not sure how you monitor and maintain a well sitting out there by itself with no normal usage.

My advice is to wait. You're parsing the financial analysis too fine.

Teague
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Re: Drill well today or drill well later?

Post by Teague » Sat May 11, 2019 8:43 pm

Well, then. Or, well now.

A few things to consider:

-In my area, new wells are coming under increasing regulation as water scarcity becomes more known. Here, farmers and some homeowners are drilling like mad to ensure they are grandfathered in under existing rules, rather than likely be restricted by new regulations in the future. This argues for drilling now.

-In some areas a dropping water table could mean that a sufficiently deep well today may be marginal or useless several years down the road. This argues for drilling later, when the target depth is better defined.

-Though not likely revolutionary, there may be advances in well technology and materials in the next few years, so later could be better.

-Life is unpredictable. There is some chance that something will alter or cancel your development plans. For example, after I had lived in my house 10 years, it was discovered that the entire development sits on top of an old WWII practice artillery and bombing range. (We are now advised to use a bit of caution when planting trees and such, just in case we discover a piece of live ordnance.) If this were known before the area was developed, I doubt the neighborhood would have been built at all.

Good luck.
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MP123
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Re: Drill well today or drill well later?

Post by MP123 » Sat May 11, 2019 9:17 pm

Bringing electric in will involve ongoing monthly costs even though you aren't using the service yet. If access is easy and not likely to be a problem in the future I'd wait on the electric.

Drilling a well might be a good idea now. I don't know where the site is but in some areas water is hard to find and a proven well will increase the property value with no ongoing costs even if you later decide not to build.

You wouldn't want to hold the property for 15 years and then find you can't get potable water.

Pu239
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Re: Drill well today or drill well later?

Post by Pu239 » Sun May 12, 2019 12:15 am

Usually the location of a well is based on knowledge of site factors such as locations of structures, septic drain field and possibly hydrogeologic features, some of which must be accounted for when applying for a permit. If drilled now but used much later, the well head must be secured to prevent vandalism (like kids dropping in rocks, etc.). Subsurface integrity of the well over long periods of non-use shouldn't be a problem but construction problems are normally discovered soon after installation so any testing of well yield, water level/drawdown, water quality (turbidity, siltation) should be done upon completion, not years later after the well contractor might have gone out of business. In difficult geologic terrains, more than one hole might have to be drilled to locate a spot with a sufficient water supply (been there, done that, cost me a bundle).

One drawback of waiting is that well permitting laws might change for the worse with water pumping rates and use restricted based on acreage or some other factor. If your property is located in a rapidly developing area with a limited groundwater resource, this may suggest drilling sooner rather than later.

heyyou
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Re: Drill well today or drill well later?

Post by heyyou » Sun May 12, 2019 1:01 am

Fifteen years ago, our well cost $3300 to drill, very cheap when compared to all the other costs of building from scratch, and it was good to know about its measured performance before we spent more on the property. In our rural neighborhood, some wells are much better than others, and that matters. The driller said he could move the pump into the edge of our garage when it was built.

Consider the well placement if you will have a septic system, and your well location might limit where a new neighbor could put their septic lines and vice versa. So drill now, but delay the electric power development.

The driller could also wire the well to run off of a portable generator if you wanted to plant some trees soon that need initial watering. Beware of the weight of larger generators when you are loading and unloading them from your vehicle, every time you visit the property.

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Watty
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Re: Drill well today or drill well later?

Post by Watty » Sun May 12, 2019 1:25 am

One risk you have is that the rules could change and you might not be able to get all the needed permits to build especially if you wait 15 years to build. I have heard of this happening.

You might consider putting a small cabin on the property now so you might be grandfathered in on any future changes and you could get some use out of the land now. If you design it right the cabin could be expended when you are ready for a build a bigger house.

Depending on the area you could also build some sort of small rental home on the property. Having someone live there would help prevent people from dumping stuff or coming in and cutting some of the trees. Timber theft can be a problem in some areas.

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SevenBridgesRoad
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Re: Drill well today or drill well later?

Post by SevenBridgesRoad » Sun May 12, 2019 1:43 am

A lot can change in 15 years. My wife and I bought our future retirement home in 2003 in the area we knew we wanted to retire and live out our lives. By the time retirement rolled around last year in 2018, my terminal job took us to a dream location in 2014. We sold our ‘retirement home’ after 11 years and love the small city where we actually retired from my final job. I think we be be HERE forever. Point is, you never know. Bogleheads plan ahead but remain flexible.
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CurlyDave
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Re: Drill well today or drill well later?

Post by CurlyDave » Sun May 12, 2019 3:16 am

Well regulations can change drastically in a short period of time.

A friend had to pass on buying a piece of property because it had been divided many years ago, and new well regulations about the setback from property lines for a well made it impossible to drill on that property.

How much of your net worth is going to be tied up in the well? 1% or so might be worth the piece of mind of knowing the well is in and good. 10% would be a no go for me.

When we looked at properties a few years ago, having a developed well and electricity in did not increase the value of a parcel nearly as much as these items cost.

I would wait on electricity. If someone puts in in closer to your site than the current closest utility your costs could go down. At least around here, the electric companies can get easements to run lines anywhere they want.

carolinaman
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Re: Drill well today or drill well later?

Post by carolinaman » Sun May 12, 2019 6:59 am

FrugalInvestor wrote:
Sat May 11, 2019 8:41 pm
A lot of things can change over time, especially if it turns out to be 15 years. I'd wait until the project is a definite go.
+1. Wait until you are much closer to starting your project. If you drill it now, you may get to replace the pump before you move in and may have other costs, like electricity. Also, it is usually not good to have something like that that is not being used regularly. That might result in other problems.

Frankly, I do not understand why you would even consider drilling it now.

Yooper
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Re: Drill well today or drill well later?

Post by Yooper » Sun May 12, 2019 7:10 am

I'd drill today. You'll know you have water (I've had friends who've needed to drill 2 or more holes before getting a well that was usable), and if you decide to sell the land later, prospective buyers know water's available on the property. No need to put a pump in, simply have it drilled, cap it, and walk away. I'm no expert, but in my limited experience (and we're on a well so the subject comes up from time time) I've never heard of a well deteriorating due to non usage.

Wouldn't bring in power until I needed it.

Valuethinker
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Re: Drill well today or drill well later?

Post by Valuethinker » Sun May 12, 2019 7:41 am

miamivice wrote:
Sat May 11, 2019 8:18 pm
My wife and I purchased some acreage in the country that we plan on building our forever home in a few years. I would like to do build in about 4-5 years, but it might be as long as 15 before we build.

I have the option to bring electric to the building site as well as drilling a well today, or waiting until the start of construction to build. Of course, the cost to drill a well and run electric later is more than what it would cost today, but I don't know the annual rate of increase of construction costs. Total cost might be $50k or so.

So, I will put it to the Bogleheads: Should we drill a well and run electric today, or wait until we build a house in the future?

In other words, does money in the stock market appreciate faster than the rate of increase of construction costs?
You do need legal advice. The law of water is complex especially if you are west of the Mississippi in the USA where the doctrine of riparian right usually does not apply (but may apply to groundwater).

I expect that drilling the well asserts legal right to that water even if undrawn. Undrilled it might not.

That would make me want to drill now unless you are sure this is an area that never goes water short (and can you trust the historic record, these days?).

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SpringMan
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Re: Drill well today or drill well later?

Post by SpringMan » Sun May 12, 2019 7:44 am

Unless you know exactly on the property where your home is going to be, wait on well and septic system. Maybe city water and sewers will be available in the future.
Best Wishes, SpringMan

mpnret
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Re: Drill well today or drill well later?

Post by mpnret » Sun May 12, 2019 7:56 am

Wait until you are ready for all the reasons previously mentioned. Why get electric if you don't need it yet. Also you didn't mention type of well, average depth in the area, etc. What if it sits for 5 years and then you need a new pump due to lack of use. This only sounds like a good idea for the well driller.

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Sandtrap
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Re: Drill well today or drill well later?

Post by Sandtrap » Sun May 12, 2019 7:59 am

Drill later.
Safer for your well.
Your plans may change to use the property.
Your well location may change.
Water levels may change.
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Nowizard
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Re: Drill well today or drill well later?

Post by Nowizard » Sun May 12, 2019 8:18 am

Electrical costs would depend on whether electrical connections were brought to "The street only" or for immediate use. If the well were drilled, it would require the decision of whether to have an electrical pump for use of the water prior to building. If you were doing some property clearing or landscaping prior to building, for example, you would probably want access to water and would incur a monthly charge for electricity. You might talk to locals to determine whether having electricity and a well would enhance property value or a sale in the event you later decided to sell rather than build. We chose to drill and install electrical connections in a similar situation, partially because we wanted to know the water quality in the specific area.

Tim

IowaFarmWife
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Re: Drill well today or drill well later?

Post by IowaFarmWife » Sun May 12, 2019 5:27 pm

Boglegrappler wrote:
Sat May 11, 2019 8:41 pm
My water comes from a well. If I were in your situation, I think I would drill the well when I needed it, and not before. Especially not years before. I'm not sure how you monitor and maintain a well sitting out there by itself with no normal usage.

My advice is to wait. You're parsing the financial analysis too fine.
We have well water, also, and I agree with this advise. Having a well sit for weeks, months, maybe years without monitoring and regular use is not a good idea.
“The quickest way to double your money is to fold it in half and put it in your back pocket.” —Will Rogers

WhyNotUs
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Re: Drill well today or drill well later?

Post by WhyNotUs » Sun May 12, 2019 7:00 pm

Easy, do nothing unless or until there is some change that warrants it (either you are ready to build or something else)
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adamthesmythe
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Re: Drill well today or drill well later?

Post by adamthesmythe » Sun May 12, 2019 8:11 pm

Decide whether it really is 4-5 years or 15. 15 years is the same as "maybe never."

nexesn
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Re: Drill well today or drill well later?

Post by nexesn » Sun May 12, 2019 8:57 pm

carolinaman wrote:
Sun May 12, 2019 6:59 am
FrugalInvestor wrote:
Sat May 11, 2019 8:41 pm
A lot of things can change over time, especially if it turns out to be 15 years. I'd wait until the project is a definite go.
+1. Wait until you are much closer to starting your project. If you drill it now, you may get to replace the pump before you move in and may have other costs, like electricity. Also, it is usually not good to have something like that that is not being used regularly. That might result in other problems.

Frankly, I do not understand why you would even consider drilling it now.
+1. Pumps should be used once the well is drilled. If left idle for 5 years or 15 years, you may find that you need to replace or fix it. There is also the chance of vines, roots and other articles that could make you then maintain the well when you are ready to truly build the property.

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cheese_breath
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Re: Drill well today or drill well later?

Post by cheese_breath » Sun May 12, 2019 10:32 pm

miamivice wrote:
Sat May 11, 2019 8:18 pm
My wife and I purchased some acreage in the country that we plan on building our forever home in a few years. I would like to do build in about 4-5 years, but it might be as long as 15 before we build.

I have the option to bring electric to the building site as well as drilling a well today, or waiting until the start of construction to build. Of course, the cost to drill a well and run electric later is more than what it would cost today, but I don't know the annual rate of increase of construction costs. Total cost might be $50k or so.

So, I will put it to the Bogleheads: Should we drill a well and run electric today, or wait until we build a house in the future?

In other words, does money in the stock market appreciate faster than the rate of increase of construction costs?
Should you put in the septic in now, or wait until you build a house in the future? IMO the answer to both questions in "NO". Because you don't know the future. (See my signature.) A lot of things can happen between now and then, whenever then is. 4 years? 15 years? Never?
The surest way to know the future is when it becomes the past.

heyyou
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Re: Drill well today or drill well later?

Post by heyyou » Sun May 12, 2019 11:23 pm

Separate the well drilling from placing the water pump if that suits you, but I believe the drilling of the well does claim water for your future use, and claims the location and distance from any neighbors' future wells and septic lines, and maybe against future regulatory changes. If your property is multi-acre and somewhat symmetrical, those distances may not matter.

My experience is only on a rural acre lot, about 200+ by 200+ feet, so the house location was more obvious than on larger properties. Our well and septic are somewhat diagonal on the property so the required distance between them was easy to satisfy, and we are away from any surface water.

Pu239
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Re: Drill well today or drill well later?

Post by Pu239 » Mon May 13, 2019 1:40 pm

nexesn wrote:
Sun May 12, 2019 8:57 pm


+1. Pumps should be used once the well is drilled. If left idle for 5 years or 15 years, you may find that you need to replace or fix it. There is also the chance of vines, roots and other articles that could make you then maintain the well when you are ready to truly build the property.
My earlier comment assumed the well would be drilled and left without setting a pump. If installing a pump at the time of well completion, I agree it would be inadvisable to leave it for long without use. Too many potential problems can arise if chemical quality of the water fosters encrustation, corrosion and/or bio-fouling of the pump.

deikel
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Re: Drill well today or drill well later?

Post by deikel » Tue May 14, 2019 2:18 pm

Depending on your location (city, town, country), you might also want to wait to drill the well since in 15 years the town might run a waterline along your road and you might have the option of city water vs drilling a well.....or a sewer system vs leach field for that matter.

Heck in 15 years maybe solar cells and battery are cheaper then running electricity to your house ? Who knows...

Also, if you drill a well your property value goes up and you pay more taxes ?

In any case, I would wait, most certainly I would run a PERC test to confirm building site is possible before investing anything..plans change and life happens. I can not see how construction costs increase more than market return over 15 years.
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