If you are a property owner in an area that has precious resources like oil, gas, or minerals, you may consider the immediate revenue that your land can provide you and your family if you were to sell the rights to your land to companies that are waiting to pay top dollar for the right to access those resources. The team at Mineral Auction know that the value of your land can be a long-lasting benefit to you and your family members if managed correctly, so we have focused on connecting property owners with our impressive list of over 11,000 buyers who are interested in purchasing the rights to your land. We bring vetted, interested buyers to you, and help you secure your financial future.
While many people know exactly the ownership status of their land, or who is in charge of granting access to it, property ownership is not always so clearly defined for other families. There may be a debate over who truly owns the land, who has the rights to it, or who is in control of decisions that concern a larger family’s property. We will discuss in the sections below how to find out who has legal ownership of a property and how mineral rights can be granted once that has been cleared up.
If you are looking to get the most value out of your land and take advantage of the current energy and natural gas boom in the United States, now is a great time to discuss auctioning off the rights to your land. With our extensive list of interested buyers, we know that it doesn’t make financial sense to only offer it to them directly. Instead, we put your rights up for auction so that our group of interested buyers can compete against each other for the rights. Who does this benefit, you ask? It benefits you, the property owner, who will get the absolute best price, driven up at auction by qualified buyers. Contact us at (512) 698-2802, email us through our website’s contact form, or email us directly to get started today.
Finding Your Mineral Rights Records
It is important to do a thorough search for mineral rights records because it is not always as simple as finding who owns a particular property. In fact, in some cases, the landowner is not always the person who holds the mineral rights, even if they have an official deed to the property. When new property owners purchase a piece of land, they should be informed of existing rights. Otherwise, the rights are automatically transferred over to the new owners of the property. In particular cases, though, especially with the first oil and gas companies in this country, a company may have retained the rights to the minerals and resources on a given property, even after selling the ground property (where a home might sit) for settlement. The companies would allow people to purchase the property, all while keeping the rights to mine on that land at a later date and time.
Common ways to research mineral rights include:
- Reviewing County Records and Tax Assessor’s Documents – By performing a title deed search at the county records office, you can see the ownership history of any particular property over time. If a gas and oil company ever owned the property in the past, this might be an indicator that they may have retained the rights over time. The deed will probably not have a clear sign of mineral rights, so you may have to do some more intricate research, but this is a good start for most people to find out who has the rights to their property.
- Loan Default and Foreclosures – If a property has ever gone through foreclosure or if an owner has ever defaulted on a loan, the bank has taken control of the property, including the mineral rights to that property. If the property was sold at auction, the bank might have neglected to transfer the mineral rights to the new owner, so this is an important item to research and note.
- Royalty Deeds – On certain properties, an owner may have issued a royalty deed, which allows the owner to collect a “royalty” on minerals that are mined from their property.
- Title Company Search – Title companies, can do focused searches to find out who has mineral rights to your property. While you may be able to do this yourself and title companies typically charge a fee for this service; sometimes it is worth paying a nominal fee to have a professional search the official records for you.
Frequently Asked Property Ownership Questions
It is not uncommon for property owners to be unfamiliar with the specific laws, terms, and regulations regarding the details of their property, especially when it comes to mineral rights. Below are a few frequently asked questions that people have when it comes to property ownership:
What happens if there is a dispute over rights?
In certain cases, a company may fail to pay royalties that it owes to royalty deed owners, or there may be a dispute over who owns or controls the land. In cases like this, property owners or deed-holders may wish to consult an attorney to help resolve disputes, even if it means legal action. With the ownership and all of the financial benefits at stake with valuable property, it is worth going through the trouble to make sure you have complete ownership of what you are owed.
What is the difference between “surface estates” and “mineral estates”?
In Texas, there are two distinct sets of rights when it comes to land ownership, called “estates”. In some regions of the state, “surface estates” and “mineral estates” are not the same, and a party can own one of them and not necessarily own the other. An owner could sell the surface estate and retain the rights to the mineral estate, or vice-versa.
Which is dominant? The surface estate, or the mineral estate?
Again, in the state of Texas, the mineral estate is the dominant estate, according to state law. Even if the estates have been “severed”, meaning one person owns the surface and the other the mineral estate, the person who owns the mineral estate has free reign “within reason” to explore, develop, and produce oil and gas beneath the property. To learn more about surface estates and mineral estates, read more at on the official website of the Railroad Commission of Texas.
Why should I choose The Mineral Auction to handle the sale of my mineral rights?
As you can see above, the rights to the natural resources beneath your land are governed by specific rules and regulations, many of which have been around for over a century. Instead of trying to negotiate deals for yourself and work out complicated arrangements with buyers directly, consider turning to the experts who know the process and can get you the most value for the rights to your property.
When you auction the mineral rights to your land with The Mineral Auction, you stand to gain immediate financial liquidity for yourself and your family, a financial security that can last for generations to come. You can capitalize on valuable tax savings before taxes go up, or as soon as they start to drop, and you may be able to take advantage of the energy boom that we are currently experiencing. Once it is over, you may not be able to get as much for your property as you would if you had sold the rights during this time.
Our mineral rights brokers have the experience and the network of reputable, interested buyers to ensure that you get the best value for your oil and gas royalties and mineral rights. Our fees are tied directly to the price you get for your rights, so we will always strive to get you as much as possible for the rights to your land, unlike other “set-fee” companies who don’t care who wins in the end. We will pitch your rights to thousands of interested buyers all at once, saving you the hassle of having to negotiate with different buyers in a line. You will be able to rest knowing that you have an experienced broker on your side. Our trained brokers will help guide you through every step of the process and will help you maximize your profits in the end.
If you are considering selling your mineral rights, turn to the experts at The Mineral Auction today. By putting the rights to your land up for auction, you can maximize the value and realize the enormous financial benefits immediately. Contact us through our website’s contact form, by email, or call us directly at (512) 698-2802 today and get the process started.
FAQs
How do you value mineral rights for sale? ›
One quick and dirty approach is the “rule of thumb.” Those following the rule of thumb say that mineral rights are worth a multiple of three to five times the yearly income produced. For example, a mineral right that produces $1,000 a year in royalties would be worth between $3,000 and $5,000 under the rule of thumb.
When should you sell mineral rights? ›If your mineral rights make up more than 5% of your net worth you should consider selling. After selling mineral rights, you can invest in a total stock market ETF that will give you diversification AND give you a dividend payment every quarter.
Should you ever sell mineral rights? ›When it comes to mineral rights, the standard admonition has long been consistent and emphatic: Avoid selling them. After all, simply owning mineral rights costs you nothing. There are no liability risks, and in most cases, taxes are assessed only on properties that are actively producing oil or gas.
What does it mean to sell mineral rights? ›Mineral rights generally include the right to sell all or part of the interest, the right to enter the land to produce and carry on production activities, the right to lease the mineral rights to others, and the right to create fractional shares of the mineral interest.
How do you value mineral royalties? ›As a mineral rights value rule of thumb, the 3X cash flow method is often used. To calculate mineral rights value, multiply the 12-month trailing cash flow by 3. For a property with royalty rights, a 5X multiple provides a more accurate valuation (stout.com).
Can you get rich off mineral rights? ›Mineral rights can be a very valuable – and profitable – property interest if you know how to utilize them. Mineral rights can refer to oil and gas, but can include other valuable substances like gold, silver, coal, and even sand, gravel and clays.
Why do people sell mineral rights? ›People sell their mineral rights for a variety of reasons. Some need immediate cash, while others are seeking to improve the quality of their lives. Most want to sell while their minerals still have value and to avoid burdening their heirs with the learning curve and management duties.
Can you sell royalties? ›Recording artists also have the option to monetize their royalty-based assets and sell any portion of their producer royalties. This allows artists to creatively leverage earnings out of previous hits and high earning titles to fund upcoming projects or personal financial obligations.
Do mineral rights ever expire? ›Every mineral rights agreement is different. However, most mineral rights agreements can last anywhere from 2 to 20 years. There is typically a primary, and sometimes a secondary, term for mineral rights leases that determines mineral rights expiring, depending on if any drilling has occurred.
How much do oil royalties sell for? ›They generally range from 12–25 percent. Before negotiating royalty payments on private land, careful due diligence should be conducted to confirm ownership. Mineral ownership records are often outdated.
Do most people own the mineral rights of their property? ›
In the United States, landowners possess both surface and mineral rights unless they choose to sell the mineral rights to someone else.
Are mineral rights the same as royalties? ›Mineral Rights Owner- If you are solely a mineral rights owner, you earn the royalties that come from extracting the minerals from the land in question. You do not have control over what occurs on the surface. As the mineral rights owner, you can sell, mine or produce the gas or oil below the surface.
Who owns mineral rights? ›Generally minerals are held in private ownership, and information on mineral rights, where available, is held by the Land Registry together with details of land surface ownership.
Is buying mineral rights a good investment? ›By investing in mineral rights, you can receive greater returns on your real estate investments than just equity appreciation. Mineral rights to oil, coal, natural gas, or other valuable natural resources can substantially boost your investment portfolio as labor-free sources of revenue or passive income.
Are mineral rights an asset? ›Oil and gas mineral rights are an asset. The value of an asset will change over time due to a number of different factors. Well production, commodity price, development activity and increased accessibility to the minerals through new technology, will impact oil and gas mineral value.
How do you profit from royalties? ›The easiest way to invest for royalty income is by purchasing shares of a royalty trust. These are publicly traded corporations that acquire ownership of rights to leases and deposits of oil, gas and minerals. The income generated from royalties is distributed to shareholders as dividends.
How much are royalties usually? ›Generally, the standard royalty rates for authors is under 10% for traditional publishing and up to 70% with self-publishing. That's right. In the example above, self-published authors make over $24,000 more than traditional authors for the same number of books sold.
What percentage of profit do you pay for royalties? ›Calculating royalty percentages
Musicians and authors can usually expect between 2% and 10% from their publishers. Patent owners can usually set their own rate and will be able to demand a higher royalty for exclusive rights to their patents.
Once your mineral rights are leased and producing, you'll most likely receive monthly royalty checks from the company operating the well.
Are mineral royalties earned income? ›Royalties. Royalties from copyrights, patents, and oil, gas and mineral properties are taxable as ordinary income. You generally report royalties in Part I of Schedule E (Form 1040 or Form 1040-SR), Supplemental Income and Loss.
What are mineral royalties? ›
A royalty is a fee that is imposed by local, state or federal governments on either the amount of minerals produced at a mine or the revenue or profit generated by the minerals sold from a mine. A royalty can be imposed as either a “net” or “gross” royalty.
What is the interest of mineral rights? ›Someone who has a mineral interest in a property has full executive rights to the minerals found on, in, or beneath the land. They can explore the minerals, develop them and arrange for mineral production. They can receive royalties, rental payments, and lease bonuses for the minerals found on the property.
What can I do if my royalties are not being paid? ›Landowners who suffer underpayment of royalties, rental delay payments or other payments can file a claim for the amount of underpayment. In some states, you may also file a claim for any interest that would have accumulated across the time period in question.
Does royalty free mean you can sell it? ›An image that is royalty-free is not necessarily free for commercial use — that is, any use that could lead to buying or selling something. The most reliable image services require you to pay a fee for a license that allows you to use the image for commercial or non-commercial uses, as long as you follow the terms.
Do royalties ever expire? ›For artists in the US, the copyright protection of a song lasts for the lifetime of the copyright holder and an additional 70 years after their demise. This law applies to all bodies of works that have been published since 1978. The payment on these royalties also lasts for the duration of the copyright protection.
Who pays royalties and who do they pay them to? ›Businesses and organizations pay royalties to owners to use their creative works and pay owners for their intellectual property or ownership interests like mineral rights. Users pay royalties based on the terms of a legal license agreement.
How long does a mineral claim last? ›The 60-day period may be extended by BLM if necessary to comply with other applicable requirements of law.
How are mineral rights secured? ›The easiest way to buy mineral rights is through a reputable auction house. The quality and price of mineral rights sold at auctions vary widely. You will find rip-offs with a 60-year return on investments (ROIs) as well as high-quality assets at a reasonable market price.
What does no mineral rights mean? ›Mineral rights don't come into effect until you begin to dig below the surface of the property. But the bottom line is: if you do not have the mineral rights to a parcel of land, then you do not have the legal ability to explore, extract, or sell the naturally occurring deposits below.
What are the 4 royalties? ›- Mechanical royalties.
- Performance royalties.
- Synch royalties.
- Print music royalties.
How do you determine the value of oil royalty? ›
The value of a royalty interest is derived from expected future revenues generated by leasing and/or production, which are largely determined by oil and gas market prices and the current drilling environment.
What is the difference between property rights and mineral rights? ›Surface rights are what you own on the surface of the property. These include the space, the buildings and the landscaping. Mineral rights, on the other hand, cover the specific resources beneath the surface.
Who has mineral rights on land? ›The Supreme Court, in 2013, conferred rights to mineral wealth on owners of surface rights rather than vesting them in the state. The Supreme Court, however, is yet to rule on certain aspects of ownership of minerals such as the liability of private owners to pay royalties to the state.
Does the US government own all mineral rights? ›The federal government holds the mineral rights for almost all federal lands, with the exception of 4 million acres of acquired lands.
Who is entitled to royalties? ›Royalties generated are typically split 50/50 between songwriter and publisher. There are often multiple songwriters attached to a song, each of whom may be owed a different percentage of the royalties collected, and each may work with different publishers to collect.
What are the different types of mineral ownership? ›There are 6 types of mineral rights, including mineral interest (MI), royalty interest (RI), overriding royalty interest (ORRI), working Interest (WI), non-operated working interest, and net profits interest.
What is the difference between a royalty deed and a mineral deed? ›With a mineral deed, the holder usually has responsibility for development and production of the extraction on the property. That risk comes with the potential reward of the majority of the profit that comes from it. With a royalty deed, the holder does not usually bear the risk of the development and production.
Does a landowner own the minerals under the surface? ›While the government grants mineral rights to a company to explore for and produce oil and natural gas, mineral rights do not include access to the surface land – surface access is granted by the landowner.
Who owns the mines and minerals? ›Who owns the mines and minerals? The common law presumption is that a landowner owns everything below the surface down to the centre of the earth. This includes any mines and minerals which happen to be present. This common law presumption may be rebutted by showing that severance has occurred.
What are mineral rights examples? ›A mineral right allows a property holder to own, extract, and sell minerals under the Earth's surface. These minerals can include coal, oil, natural gas, gold, silver, copper, iron, and more.
What are the advantages of owning mineral rights? ›
This means that those with rights to valuable resources on their property can sell those rights to private companies, gaining ongoing royalty payments or substantial up-front payments. They can also lease the right to develop these minerals to companies that have the ability to extract valuable natural resources.
What type of asset are mineral rights? ›What are mineral rights? Mineral rights are real property that can be bought, sold or leased like any other real estate. They are often separated from the surface estate, making them more liquid than traditional surface real estate.
What mineral is the best investment? ›- Gold. A long-standing favorite of precious metals investors, gold has been used as a store of value for thousands of years. ...
- Silver. Silver is a close runner-up to gold in terms of its popularity as a precious metal investment. ...
- Platinum. ...
- Palladium. ...
- Copper. ...
- Bars. ...
- Coins. ...
- Rounds.
"Mineral rights" entitle a person or organization to explore and produce the rocks, minerals, oil and gas found at or below the surface of a tract of land. The owner of mineral rights can sell, lease, gift or bequest them to others individually or entirely.
How much taxes do you pay on royalties? ›Federal tax must be withheld at the rate of 30% of gross royalties unless an IRS tax treaty is applicable. See IRS Tax Treaty Table 1 (Royalties).
Are mineral royalties passive income? ›“Income from oil and gas royalties is passive-type income derived from the landowner's royalty, overriding royalty, or a net profits interest.
How do you value mineral resources? ›To calculate the total value of the mineral reserve, the current resource rent per unit is multiplied by the total reserves, in the spirit of the Hotelling valuation principle. Additions and depletions are calculated as those quantities times the resource rent per unit.
What mineral resources are most valuable? ›Palladium is the most expensive of the four major precious metals – gold, silver and platinum being the others.
How is the value of a resource determined? ›Resource value, thus, is a function of both internal (the firm's resource base and its managers' characteristics) and external factors (the firm's market position and customers valuing the firm's output, as well as access to information).
How do you analyze a mineral? ›Additionally, other methods that can be used to analyze minerals include X-ray diffraction (XRD), X-ray fluorescence, photon-induced X-ray emission spectroscopy (PIXE), photon-induced gamma emission spectroscopy (PIGE), infrared (IR) spectroscopy, ultraviolet-visible (UV-vis) spectroscopy, and scanning electron ...
How much is the average royalty check? ›
Generally, the standard royalty rates for authors is under 10% for traditional publishing and up to 70% with self-publishing. That's right. In the example above, self-published authors make over $24,000 more than traditional authors for the same number of books sold.
How much taxes do you pay on oil royalties? ›Royalty Income Tax Rates
10% for income $0-8,700. 15% for income $8,700-34,500. 25% for income $34,500-83,600. 28% for income $83,600-174,400.
In simple terms, a mineral interest refers to a real property interest, which can be received when minerals are severed from a land's surface. On the other hand, royalty interests ensure that their holders enjoy a fraction of the generated production revenue.
Are mineral rights and royalties the same thing? ›Unlike a mineral interest owner, a royalty interest owner does not possess executive rights. In addition, a royalty interest owner does not possess the right to receive lease bonuses, delay rental payments, or shut-in payments.