All good comments. Here is a economical way to minimize (not eliminate) water problems in your tools. Please see my crude sketch.
1. If possible run the output airline from the compressor horizontally to a “T”.
2. Create a “water trap”by dropping 1-2 feet of pipe below the “T”.
3. Add a drain valve at the end of this drop. Like you would do with your compressor tank, drain this daily. This simple trap will collect a good amount of water!
4. Run your airline vertically from the “T” up to your ceiling, or at least 3-4 feet above your compressor. (There is no magic distance, I just run mine up to the ceiling.) The worst thing you can do is run your airline down next to the floor, or even below the output fitting on your compressor. The line will collect water and every time you use a tool, water will come out there.
5. Run your “main line” horiztonal across the wall. Don’t make it perfectly level, put a 1/4” drop from the high side near the compressor, running down hill to the end of your airline. This will allow condensate to run down hill to the end.
6. Drop down vertically where you want a quick disconnect or hook up to your tool. (Yup, the water running downhill from your main airline will travel down this vertical drop.) At the bottom of each drop add install a vortex water filter. Connect your tool at the output side of the filter. You can get these filters at any DIY store for $20-$30. Drain these filters daily. (Please note these filters collect water only if you are using a tool at that location. If you don’t use a tool at that location there probably won’t be any water to drain.)
7. For your airbrushes, etc., add an inline desicant filter. They are cheap insurance. Cheap disposable ones will cost $10, and should be replaced regularly. Professional, rechargeable ones will cost $100+.
Unless you are a professional shop with multiple users of air tools working all day long, you should not have to go through the expense of purchasing an air drier. I can tell your from my experience of purchasing several dryers over the years they are expensive to buy and expensive to operate.
Hope this helps,
Jon