Mineral Rights 101

If you live on a plot of land that has an abundance of mineral deposits, you’ve likely been approached about selling them for a profit. If you’re like most people, you’ve probably never thought of the minerals on your property. Because of this, you may be tempted to accept the first offer that comes your way.

Just like with any sale, however, it may be better to approach the market with caution. You don’t want to take the first offer that comes along only to find out that you could have sold your minerals for a higher price. But how exactly do you know if you’re getting a good deal or not? Unlike houses, there is a neighborhood you can compare similar minerals to.

If you’re considering selling your mineral rights, you should know that there are a variety of different factors that go into assessing the value of the minerals on your profit. Continue reading to learn about these different factors, and hopefully, you will be able to use this post in the future when you’re ready to put your minerals on the market.

  • Location

The word “location” may lead you to believe that the location of your property is a factor in the pricing of your minerals, but location actually refers to the type of ground that your property is located in. For example, a property with a lot of acres is more valuable and property with a certain type of mineral is more valuable as well.

  • Type of Agreement

The type of agreement you are potentially entering also affects how much you can sell your mineral rights for. If you are simply leasing the mineral rights, you will likely make less money than if you were to sell your mineral rights outright. However, you would maintain ownership of them after the lease has ended. Keep your future financial goals in mind when attempting to make a sale.

  • Market Value

When preparing to make you an offer, those attempting to buy your mineral rights from you will consider what the minerals on your property usually go for on the market. Not all minerals are created equal — some are far more valuable than others.

  • Likelihood of additional minerals

If the area in which your property is located is known for high levels of mineral production, this may boost the potential price of your mineral rights. If your property is located in an area in which many minerals are produced, this increases the likelihood additional minerals could be found on your property — which drives up your mineral’s value even more.

Keep in mind that this list is not exhaustive — several other factors play into the value of the minerals on your property. The best thing you can do before accepting any offer or even putting your minerals on the market is to speak to a mineral rights broker at a place like The Mineral Auction. A mineral rights broker will help you sort good offers from bad ones, as well as telling you exactly how much your minerals are worth.