Turn Your Mineral Rights Into An Investment Opportunity
While there are many variables to consider when deciding whether or not to sell your mineral rights, you have more options than merely selling your rights or keeping your rights. You can opt to sell only a portion of your mineral rights for money now and save the remainder to pass on to your children or even sell later. However, now that you have the option of selling your mineral rights for money upon finalization, it is important not to spend that money recklessly.
Investing your money earned from your mineral rights can be endlessly rewarding. When done correctly, the investment will often pay itself off and can provide you another source of income, be used to pay off a mortgage, or be used to start a college fund for your children or grandchildren. However, many people have reservations about investing money because of all the associated risks. What if the investment doesn’t work out and I lose my money? What if I don’t have a lot of money to invest? Where do I get the money that I want to spend without having to give up any of my current assets? Well, if you are lucky enough to have mineral rights, with the right resources and investment knowledge, you may be able to develop a reliable investment plan by using your mineral rights to your advantage. For this article, we will assume that you have a solid eye for starting and maintaining a business, skill for developing land, or even just managerial skills, and a little bit of will-power.
The Basics of Investing
Knowing when, how, and where to invest your money can be very confusing and hard to navigate if you are unfamiliar with the basics of investing. Investing is a tool for building wealth through smart and well-informed decisions regarding your money. While many people merely associate investing with stocks, bonds, and mutual funds, there are a wide variety of other great options to invest in that can prove to be more rewarding. The investments previously listed are a high risk that cannot guarantee a high reward. The value of these investments can be hard to gauge because they fluctuate every day.
Investing is all about the long-term returns. Once you invest your money in something, you may begin to feel excited and maybe even a little nervous about the investment. However, this is normal. Many people expect to see an instant return on investment soon after they initially invest in something, but this is not the case when it comes to investing. While it may take a while for your investment to pay off, there are several benefits from investing your money. Benefits of investing your money include the following:
- Another income – For many people, an investment often provides a second or third income. This is great for those who have extra bills or mortgages to pay off or simply just want to save money. An investment can help those who need that extra cash each month or for those saving up for a college fund. You can also set aside the money you earn from the investment in case of an emergency.
- Less work, more money – The idea behind investing is that your money is doing the work for you. When invested correctly, your money will often double within a few years.
- Tax benefits – Some investment are exempt from taxes. Real estate investments are often tax-exempt, and this is a big reason why many people decide to invest in real estate. Money for rent that you receive from tenants is not subject to taxes.
How can my mineral rights help me?
By this point, you may be wondering what all this investment talk has to do with my mineral rights. Well, if you are unsure of what to do with your mineral rights – if you cannot decide whether to sell them or keep them, maybe you can do both. You do have the option of not selling your full mineral rights but only selling a percentage and keeping the other slice. By doing this, you can receive money for the mineral upon the sale as well as still maintain ownership of the other portion of the mineral rights. If you choose to sell a part of your mineral rights and keep the other piece, you can invest your money to double or even triple your initial investment. By doing so, you can pay off any debts you may have and still have mineral rights to leave for your children or grandchildren to enjoy and decide what to do with them.
What does this have to do with investing?
If you decide to sell a percentage whether it is 25%, 50%, or 75% of your mineral rights, you can take the money you upon the finalization of the sale and use it to invest in a property. By investing in a property, you can develop it into an apartment complex, use it for farming, or start a business. If done correctly, your investment can ultimately pay for itself and then you will start to see a profit on your new venture. If you need more money along the way, you can always sell the remainder of your mineral rights or even sell your investment for twice or even triple what you initially invested in it.
Investing in property, real estate, apartment complexes, or even developing your land can prove to be a worthwhile investment. If you do not have an eye for developing your property or starting a business, investing in rental properties such apartment complexes, townhomes, and duplexes is a tremendous first investment. Rental properties especially can be a good investment for those who want to receive monthly payments from their investment. As you know, rent is often due monthly, so your tenants will be sending you payments each month for their rent. It is important to remember that as a property owner you will be responsible for paying the mortgage, taxes, and the cost of maintaining the property. However, ideally you will charge enough rent that will cover these expenses, and you can charge a little extra to make sure you are profiting from this investment. The same concept applies if you develop a property have companies and businesses lease your property.
While more responsibilities come with investing in a property than investing in stock, you are more in control of your investment and can make a profit rather than hoping that your shares will increase in value.
At The Mineral Auction, we want to make sure that our clients have a comprehensive understanding of all the options available to them. Our firm works tirelessly to ensure that every one of our clients is equipped with the knowledge to make well-informed, educated decisions regarding their mineral rights and that includes informing you of all of your options. If you have a keen eye for investing, property development, or business development, then selling a portion of your mineral rights and investing the money earned may be an excellent option for you to maximize your earning capabilities.
However, if you’d prefer to sell your mineral rights and have monthly royalties or get a check upon finalization, that often works well. We are dedicated to working with each of our clients to determine which option is best for them. While we would love the opportunity to have your mineral rights, the last thing we want is for you to feel taken advantage of. Sometimes mineral rights and royalties can be confusing, so we want to ensure that you know all of your options before deciding to sell your rights. If you are interested in learning more about your options, selling gas rights, oil rights, or selling mineral rights, we offer a free evaluation to decide what the best option is for you. Contact us at (512) 698-2802 to learn more about your options today.