Critical Factors to Understand Before Investing in Mineral Rights

Investors are attracted to mineral rights investing for many reasons. Depending on the contract you negotiate, investors often have a lot of power when it comes to what happens with the oil and gas minerals on a property. Having this control, along with the potentially lucrative benefits and ROI, make mineral rights investing an attractive option to add to a portfolio. Before you jump into owning mineral rights, it’s important to get a broad understanding of how the process works, which usually involves working with experts in the industry. Here are some critical factors every mineral rights investor should understand.

Know The Laws and Rules of Mineral Rights

The laws and rules of oil and gas minerals vary among different states. You could spend hours doing your own research on these laws or you could have conversations with experts who deal with them every day. With that said, there are many commonalities regarding the laws of oil and gas minerals across the country. Once you’ve gained a basic understanding of them, it’s worth your time to speak with an expert to confirm your understanding.

Understand The Benefits and Drawbacks of Mineral Rights Investing

Every mineral rights deal is unique and some are much better than others. One of the most attractive benefits for investors is having the ability to somewhat control what happens to the minerals on the property. With a properly-negotiated contract, you can make decisions that benefit your investment portfolio the most, regardless of what oil companies want to do. A drawback many investors express is the length of time it takes to enter a contract. Many steps have to be taken and it can take months to finalize a deal. Patience is a requirement with many investments, but it’s a critical attribute to have with mineral rights investing. Otherwise, you could end up with a contract you regret later.

Negotiate Terms With Experts

Unless you’re an expert in mineral rights investing and working with oil and gas minerals every day, seek the advice of an expert. Oil and gas companies will try to make a contract enticing for the average investor, but when an expert looks at it, you could save yourself thousands of dollars or more. Legal language should always be evaluated by an attorney, so you clearly understand what terms you’re agreeing to. The overarching goal of oil and gas minerals experts is to find the right deal for your investment strategy, so this step cannot be skipped.

Eckard Land & Acquisition works with high net worth investors who are looking to add mineral rights investing to their portfolios. We often get the broad question of “can you own mineral rights?” While the simple answer is yes, mineral rights investing may not be for everyone. We work with investors by doing all the research for them, while also focusing on the aggregation, maturation, and liquidation of mineral rights. After our preliminary research has concluded, we will sit down with investors and discuss strategies to ensure the right deal is negotiated. To learn more about how our process works, don’t hesitate to contact us at any time.