The property that you own may hold far more value than you think. With the possibility of valuable minerals being found, landowners can profit off of the sale of these minerals. In fact, there are a plethora of reasons why it’s safe to sell the minerals on your land and do so without relinquishing your property rights.
Unless land is sold, it normally will not produce a profit for the owner. When mineral rights are sold, however, this provides immediate financial security. Depending on the quantity of minerals found, a person may have thousands or millions of dollars’ worth of minerals that they never knew about. These minerals are valuable and many companies will pay to purchase the right to use these minerals.
Being weary of royalty payments is a common concern. However, cash upfront payments are often given to eliminate this concern immediately. With cash, there is no risk of royalty payments stopping abruptly.
When minerals are sold, the property rights still belong to you – the owner. While the minerals may have been sold, the land and any structures are completely yours. Besides getting paid for the minerals that have been found, nothing else changes in terms of what can be done on the land or who owns it.
Profits made off of the selling of minerals are not taxed in the same manner as your income. Rather, the 15 percent tax rate given to capital gains profits is given when the minerals are sold. This means that more money stays in your pocket from the sale of the minerals.
Selling the rights to your minerals relieves the burden of worrying about the minerals during drilling. Once sold, the responsibility of any mechanical failure devaluing minerals is now the responsibility of the buyer. This is a form of security knowing that no matter the outcome, the profits made by you cannot be taken away.
While minerals are valuable, without selling them, the landowner is simply not going to profit. In fact, many potential sellers have waited for a better deal to come along only to find out that their minerals are not as valuable anymore. With the possibility of an instant cash infusion, less risk and a minimal tax rate, it is safer to sell the minerals than to hold onto them.