Benefits of Selling Mineral Rights
Regardless of where you live, a common dream is to own land. People often buy real estate and build structures to live in or rent out. Rarely do landowners think of what’s under the surface, and they end up missing out on significant financial opportunities.
At Momentum Minerals, we love helping landowners throughout the United States of America get the most for the minerals found on their property. Here’s how selling mineral rights can give you the financial freedom necessary to lead your best life.
What are mineral rights?
Ownership rights stop at the surface when purchasing property in many countries. Landowners in the United States, however, have the right to develop and exploit that estate, including natural resources found below the ground. Ownership of underground assets is commonly called mineral rights or mineral estates.
The term mineral rights generally signifies the authority to explore, develop, extract, and market subsurface minerals. They often include crude oil, natural gas, coal, precious metals, non-precious or semi-precious metals, specialty or rare earth elements, and other solid materials like clay, gravel, sand, and stone.
Every property’s mineral rights are unique. As a result, there is no set way to maximize value. Two common paths are leasing and selling.
When leasing, a company rents the land for a set time to potentially extract minerals. If minerals are unearthed, the landlord receives a monthly royalty payment for an agreed-upon period. Leasing enables the landowner to earn more money if mineral prices increase over time. Outside factors can cause the value of subsurface minerals to swing wildly, though, and the lessor could potentially lose money over time. Examples include supply-and-demand changes, political instability, global pandemics, and varying commodity prices.
Selling mineral rights is an easy, stress-free solution. The landowner collects a sizeable lump-sum payment and doesn’t have to worry about receiving accurate royalty fees from the lessee. They are also protected from external factors that hurt mineral values.
Benefits of Selling Your Mineral Rights
When a property you own contains valuable metals, minerals, or rare elements, it’s potentially far more valuable than just land to enjoy. It can generate revenue that improves the quality of life for you and your loved ones. Here are a handful of ways landowners with whom we’ve partnered have used money from mineral rights sales.
Not everyone who owns mineral interests is a millionaire. Many mineral rights owners work hard to make ends meet. They might have inherited minerals through an estate that wasn’t appropriately settled or negotiated sub-optimal lease terms. Also, they may have never investigated the value of what they own. Momentum Minerals helps clients maximize the value of their mineral estates, which results in the best-possible lump-sum payment.
A robust education is more important than ever before, and it lays the foundation for a successful career. At the same time, higher education is expensive. Tuition, room and board, and books alone can cost more than $10,000 annually for state universities. Private university costs can exceed $40,000 per year. With a large lump-sum payment from selling mineral rights, you’ll have the cash needed to cover education-related costs. Many states have college saving plans in which you can deposit a lump-sum payment.
You must report and pay taxes on royalty payments every year. By selling, you’ll simplify your tax returns because you no longer have that yearly burden. Also, you can potentially benefit from long-term capital gains tax rates.
Unplanned events like vehicular accidents, on-the-job incidents, and previously undiagnosed health issues can result in long-term or expensive hospital visits. Treatment bills can mount, and if you’re unable to pay, collection calls may begin. A lump-sum payment can be used for medical care while keeping you financially stable.
By selling mineral rights, you no longer have to keep up with paperwork like depletion schedules, division order files, and tax records. It also reduces the amount of work involved in estate planning. Liquidating mineral rights enables you to distribute cash instead of dealing with the headache of dividing property.
Reduced financial risk
Landowners who lease mineral rights to operators have increased exposure to risk. Monthly royalty checks are at the mercy of unpredictable and continually changing market conditions. Also, mechanical or operational problems with production equipment can impact the amount of oil and gas produced. By selling mineral rights for a lump sum, these pitfalls are avoided.
Cashing in mineral rights frees you to retire and enjoy your golden years. You can spend time with loved ones, travel, and practice new hobbies.
Learn what you own, maximize its value
If you don’t know exactly what you own, don’t worry. Momentum Minerals can help you figure it out. Our expert team has years of experience appraising and buying mineral rights and oil and gas royalties. We’ve developed a three-step process that’s simple and hassle-free, and you can rest easy knowing you’ll receive the best offer and optimal service. Here’s how it works:
1) Information gathering
Our team engages you in exploratory discussions, such as requesting information about your royalties and minerals. This typically includes recent check stubs, copies of leases, assignments or conveyances, and maps, if applicable. A big portion of our initial mineral rights analysis is performed with your check stubs alone. This enables us to understand what you own, where it’s located, and who’s paying you.
2) Evaluation and Appraisal
Once we’ve received the necessary data, the Momentum Minerals evaluation team takes over. Our landmen, engineers, and financial analysts review the asset’s value and make on offer. Outside technical experts occasionally support the evaluation and appraisal process, ensuring you get the highest investment return. Our associates are some of the industry’s most qualified engineers, who also consult for major operators. This partnership gives us intimate knowledge of most, if not all, plays.
3) Present offer
After technical data compilation, preparation, and research is complete, the Momentum Minerals executive committee reviews the final study and extends an offer. Purchase and sale agreements are drawn up after reaching an agreed-upon price, and a closing date is scheduled.
Why work with us
Momentum Minerals is a mineral and royalty acquisition company headquartered in Houston, Texas. By combining decades of mineral rights assessing experience with a customer-first mindset, we have the expertise necessary to evaluate mineral assets accurately.
Backed by one of the largest alternative investment managers serving many of the world’s most prominent institutional investors, our company can offer competitive payments for assets and quickly close transactions of any size. Areas we serve include:
Get the most for your mineral rights with Momentum Minerals. Your success is in our best interest.
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Houston, TX 77024
Houston, TX 77024