Real Estate Investor Pro Tip - Mineral Rights

Grant Trevithick Carrollton Real Estate Investor here with another pro tip. When it comes to purchasing land it is always important to understand the mineral rights for that property. Today I would like to go over a few things you should know.

It is important to note that once mineral rights have been detached from surface rights, nothing changes. To purchase land, it is imperative to make diligent research, including rights before arriving at any consequential decisions. This will prevent any form of unsavory surprises. There are instances when individuals, seeking to buy both mineral and surface rights, eventually discover that the mineral rights have been sold to a third party. You can check mortgage paperwork to figure out the kind of rights you hold. Things to put into consideration when purchasing a piece of land without mineral rights are introduced as follows:

1. Remember that mineral rights can also be bought, leased, or sold

This is an important consideration that must not be ignored before purchasing a piece of land. It should be noted that you can either lease or sell the mineral rights you own to your land to any interested party. These options have their upsides and drawbacks and enough money can be made by either receiving working interest or royalty interest. The one you prefer will be up to you to decide.

Either way, you must understand that there is a great need to get your mineral rights in front of many potential buyers if you wish to maximize your mineral rights. By doing this, you are getting the best deal. You should also get professional assistance and appropriate advice all through the process.

2. Even without mineral rights your land still has value

Mineral rights only grant ownership to the resources beneath a property. However, not having mineral rights does not imply that the land has no value. In fact, as already mentioned earlier, your surface right grants you ownership over the plants, trees, and water on your property.

Depending on the mineral and technology adopted, the depth of a mineral right varies. For open-pit mining, the average depth is between 100 to 500 meters. However, for deep mining, this could go down as far as 2.8 to 3.4 kilometers. Simply put, everything that lies on the surface belongs to the individual with the surface rights.

3. Research the included rights thoroughly before making any buying decisions

To prevent unpleasant surprises, there is a great need to make appropriate findings of all included rights before you make any buying decisions. This helps you understand everything you must know to guide your decisions. As discussed earlier, having surface rights grant you ownership to all visible resources at the surface of a piece of land.

On the other hand, mineral rights grant ownership of all resources beneath the land. Once you understand all the included rights, you can acquaint yourself with the potential upsides of purchasing the land.