Owning mineral rights can be tricky. On the one hand, sitting on valuable natural resources, such as natural gas or oil, can be a huge potential for income. On the other, it’s not an asset that’s directly in your control unless you plan on drilling yourself.
You may be hesitant to let go of your mineral rights, holding onto the possibility of a big payoff in the future or over time. But more than likely, you stand to benefit more from selling than you do leasing or sitting on them.
Here are a few reasons you should consider selling your mineral rights:
1) Guaranteed profit
Holding out for someone to lease your mineral rights puts you at the mercy of both the company you lease to and the fluctuating market value of your resources. Because you don’t know exactly what and how much you’ll find under your land, when it will be found, or how much it will be worth when it is, its long-term value is not certain. If you sell your minerals outright though, you’re guaranteed to profit no matter what lies beneath.
2) Receive payment all at once
Selling your mineral rights leaves you with one large sum upfront, versus smaller royalties that would be dispersed over time. Having that much cash value on hand opens up a lot more opportunity than a few small payments a year. You’re also likely to receive more money for your minerals when you sell upfront, as their value—and your royalties—will be constantly in flux. Plus, you’ll eliminate the hassle of keeping track of your interests and royalty payments.
3) Ease your tax burden
Most states impose taxes on mineral rights as well as the royalties you earn from them. That tax is on top of the county and federal taxes you’ll also be required to pay each year. Additionally, since your royalty income is not predictable, your taxes owed at year’s end won’t be either. After all is said and done, depending on the market, these taxes might not even make mineral ownership worth it. You’re better of selling and making a one-time tax payment, rather than holding onto them and suffering the yearly expense.
When you decide the time is right to sell your mineral rights, get in touch with Smith & Co Auction & Realty. With our extensive mailing list and targeted marketing outreach, we’ll sell your mineral rights at auction for top dollar and have your profit guaranteed in a single afternoon.
Give us a call at 580-254-3975 so we can set you up for a lucrative auction!