The only real difference between water and air cooled is noise level. Water cooled engines are generally quieter that air cooled. There are good and bad points of each side.
Air cooled engines you really need to keep the revs up to keep the internal fan running fast enough to kee the engine cool. You need to keep grass etc out of the cooling fins. You don't need to check coolant level though.
Water cooled are quiet running (usually) they do need to keep an eye on temperature and keep an eye on the cooling system and change coolant.
Then you have the diesel vs petrol debate. Diesel engines are louder (usually) use less fuel, have more torque at lower revs. More expensive to repair! more complicated to repair due to their injection system. Hard to start in the cold.
With all that said, you don't want it to run an earthmoving business. If the price was rite, i'd grab it. It may be old but i'm sure it has a lot more life in it. I had a 731 that was a late 70's model, it was a fantastic machine!!! the work i did with it was amazing. I would totally recommend getting it if the price was rite.
I'm sure others will voice their views too.
Good luck with your purchase, you will fine heaps of other jobs to use it for too.