This study examines the sufficiency of water for potable and non-potable demand. Firstly, the challenges and sufficiency of existing water sources for potable and non-potable demand are examined by considering the water gallon delivery at the doorstep, government supply line, tanker-based supply, and extraction of water through bore wells. Secondly, the cost-effectiveness of several water sources is examined by using four models, i.e., Model 1-Model 4. Each model combines sources of water (i.e., government supply line, water tankers, bore wells, mineral water delivery, and rainwater harvesting system) for potable and non-potable demand. A comparison is drawn between the cost-effectiveness of current practices and the rainwater harvesting system. The rainwater harvesting system is designed based on average rainfall data for different catchment areas and a dynamic range of residents. The findings suggest that the rainwater harvesting system is more cost-effective compared to conventional sources of water; however, it needs to be coupled with the government supply line to meet the non-potable water demand. On average, five additional houses can be covered by the rainwater harvesting system (minimum = 3 and maximum = 9) with a mean profit of 462149 PKR (minimum = 233318 PKR and maximum = 754810 PKR). Thus, even if the harvested water is not sufficient to meet the non-potable demand, it can still be preferred as a source of potable water due to its cost-effectiveness. Implications are drawn to help government and practitioners in considering sustainable actions for social well-being and promoting rain harvesting through rebates.