Water is obviously a fundamental element in Feng Shui, as "Shui" means "water".
Wind carries and disperse Qi. Water stops and gathers Qi. Where there is water, the vital energy condense, therefore Qi is stronger there.
It is said that Qi flows the Dragon Veins until it meets water, where it stops.

Water is not only one of the 5 Elements, it is an activator in Feng Shui, it strengthen any influence of Qi, wether it is a good or a bad influence.
If an auspicious land has to have water, this water should be at the right place and should flow in the proper way, slowly and sinuously.
Actually, rather than the water at the right place, it is the house which should be at the right place, according to the water flow and position.
More important, the door must be in the right direction, according to the water.

From the water position and flow on a iven land, the master choose the location and the direction of the house or the building, as well as the location and direction of the main door. Generally speaking, it is auspicious to have water in front of the main door, coming from specific directions. For example, water should not go away from the door direction. This is why a slope in front of the door is unwanted. Water and Qi could not be gathered.

In the (most frequent) case where the house is already built and there is no water in front of the door, it is very easy to artificially bring water there by digging a pond, a stream, a cascade. The bigger, the more efficient with respect to the size of the house and the land, of course. Even a small pond is good an auspicious location, but rather have no water at all than having water in an inauspicious location or direction.

Inside the house, water is also very important and must obey to various rules.
It is generally consider that it is good to have water in the North, the East and South-East, according to the elements of these Palaces.
I will add the South-West, which is the better location for water in Period 8.
Even in these four good locations, water should also activate good influences, according to every principle and formula.

Water bring a Yang energy. Even if it doesn't move, it is consider Yang and active, every water molecules are always moving. It is then recommended to put water where we want a Yang activation, in Yang areas and rooms, such as antrance hall, living room, office or even kitchen. It is generally not recommended to put water in a bedroom where we need a good Yin energy, aside from exceptions.

Among the four "allowed" sectors for water, you should know where you can put water according to the Flying Stars. Water will activate the stars and make them stronger. If you have good stars there, then it is very auspicious to have water, but if you have malevolent stars, you should avoid water there. This wil reduce the choices.

Moreover, if we consider the Ba Zhai, the 8 personal directions, we should avoid to have water in the bad palaces of the person. That is why, in some case, we can't find any place to put water inside a house. Too bad for tropical fish lovers !