Selling or buying mineral rights can amount to an enormous check being sent your way. Yet, most people don’t even know they have the rights or that it is possible. However, if you do own mineral rights in the same area where oil and gas have been found, you might find that Christmas has arrived early this year. You must know what you are doing before you get started, though, to receive the best possible outcome with this new possibility.
What Are Mineral Rights?
When you buy a property, the landowner is given privileges to the surface rights. However, often times, minerals are below the ground surface. Yet, if you do own the mineral rights, you can do whatever you wish with any natural gas, oil, helium, or any other chemical elements that you may find. You can sell them for cash, or just hold on, hoping that one day soon, prices will skyrocket.
Who Will Buy Mineral Rights?
Companies will send a Landman to the seller’s property to perform an appraisal on the value of the minerals. It is entirely up to the seller if he wishes to take the company’s offer. If he does, he must also understand the conditions set up by the buyer. Be sure you are getting involved with a reputable and honest company.
Risks in Buying
The risks in buying mineral rights are just like a risk for anything else someone does. No matter what you do and invest in, there is a risk. In a business where one day, prices can be at all-time high, and where the next day prices can be at an all-time low, you must be knowledgeable on the potential positives and negatives. Working with a professional when you attempt to buy mineral rights would be the best option. You are at less of a risk when you have a professional by your side.
Although there are some risks with buying, so is the possible cash return when you buy mineral rights. However, the possible losses are truly great, so, how can you minimize it? You can do so by working with reputable people and organizations. It is important to understand that companies, which do this for a living and have been for many years, are good sources for both buying and selling.
Difference between Selling and Leasing
Selling and leasing your mineral rights are two completely different things. If you do decide to sell, then you will lose all of your future royalties. Although you may be able to hold on to your surface rights and the actual buildings, it may be best to keep your lease and not sell if there are extensive mineral deposits on your property.
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