You can usually see this if the water is pooling up or running off your lawn. Aerating also helps the decomposition of thatch. Thatch is the dead material that builds up in between the blades of grass. Up to one half inch of thatch in a lawn is good, but anything more will choke your grass. The easiest way to aerate your yard is to rent a machine designed for this purpose.
Aerators work by either taking plugs out of the lawn, or spiking into it.
Watering Of course, the amount of watering you do depends on the amount of rainfall you get. In general, a lawn needs one to two inches per week during the growing season. In sand , a half inch of water will penetrate six inches. Most grass roots are located 6 to 8 inches down so a half inch will usually do. Watering any further down would be a waste.