In many parts of the country iron in the water is very natural and it comes in homes. We had that problem in our past home with our well water. The only thing you can do is to filter it. So, yes, even though it's not going to hurt you to drink it, it won't taste good and it will ruin your piping and fixtures. This condition is perfectly natural so there's no cause for alarm.
We traveled the country constantly as we full-timed for 16 years. We found this type of water in many places. We used a good filter for discolored water and impure water as it came into our motorhome tank and we used a kitchen filter to take out strange taste.
We drank and cooked using our fresh water tank. Just filter it with proper filters and you'll have no problems with contaniments or taste.
Here's all you need to know on filtering water and buying RV filters:
RV Filters
