People sell their mineral rights all the time. You might wonder why, since they seem like a steady source of income. Who wouldn’t want to receive a royalty check every month for doing almost nothing? However, the perception may not be the reality. Royalty checks aren’t necessarily reliable, and shifts in the oil and gas market can reduce your royalties to nothing. There are also several legal requirements that can be onerous and difficult to uphold for some people. Yes, it can be extremely profitable to own mineral rights, but selling mineral rights might be a good option for you.
Lower Your Taxes
Owning mineral rights means being subject to several potential taxes and regulations. For some owners, this might mean that it’s not worth it to continue owning the rights, whether it be financially or because it's a hassle.
Get Quick Cash
Some people need quick capital, either for another investment or for personal reasons. Selling mineral rights can help with that. The important question is how much do mineral rights sell for in the area the rights are owned. Then you can decide whether it is worth it to cash them in.
Simpler Estate Management
Mineral rights are notoriously difficult to transfer to children. The process is complicated, and it takes a long time to get through it. Not only that, but there are several expenses involved that will cut into how much you are leaving them. By selling mineral rights for capital instead, you can make it simpler and cheaper to leave something for your heirs.
Diversifying Your Portfolio
It’s always a good idea to diversify your investments. Mineral rights should not be the majority of your personal wealth. In fact, it’s safe to keep it to a much lower percentage, and anywhere from 5-10% is acceptable. If it’s any higher, then you should consider selling mineral rights to get down to a more appropriate percentage.
Selling Mineral Rights
“How do I sell my mineral rights?” you might ask? Fortunately, it’s not hard to sell. The key is to find where to sell mineral rights that will give you the maximum value for your rights. Of course, you could try to do that on your own, and many investors do, but it is generally not a good idea.
Your best option when choosing where to sell mineral rights is a mineral rights marketplace. This will open your rights to many more potential buyers than calling some investors on your own or even putting up ads. You will have motivated buyers competing for your rights. These marketplaces can help you with education, so you will not be taken advantage of. It will help with answers to questions like “how much do mineral rights sell for?” and “what are the tax implications?”
The important thing in any property or rights sale is education and understanding every factor involved in the transaction. Selling mineral rights can be complicated, and you need to make sure you get the absolute most out of the deal possible, whether it’s because you need quick cash or because you want to leave something for your children.
