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Maximizing the return on your land as a property owner

Many landowners across the United States own properties that contain oil, gas or other mineral resources beneath their surfaces. In exchange for these coveted resources, many receive royalties. In fact, the National Association of Royalty Owners estimates that nearly 12 million American landowners receive royalties for companies extracting minerals from their properties.

In Texas, mineral rights are a common issue for property owners. Whether you already own property or are looking to purchase, it is important to understand your rights, as well as how to maximize the potential return on any resources on such property.

Understanding surface versus mineral rights

When you purchase property in Texas, ownership is not quite as simple as owning the property outright. There are two distinct types of ownership: surface rights and mineral rights. Surface rights quite literally refer to ownership of everything above the surface of the property. Mineral rights refer to ownership of anything below the surface of the property, including oil, gas or other natural resources.

Getting the most return off your land

For those with ownership of both surface and mineral rights, there are several options to maximize the return you receive on potential resources within your land:

  • Sell the mineral rights. Selling to an oil or gas company to exploit the resources may give you a rewarding financial return upfront. Keep in mind that this sale may not be as much as you had anticipated and once your rights are gone, it may be difficult to get them back.
  • Lease the mineral rights. Leasing your rights to an oil or gas company can allow you to receive royalties for the resources on your property. You can retain your rights but still financially benefit from the future discovery of such resources.
  • Retain the mineral rights. You may be content with retaining your rights. Selling or leasing can be lucrative. Yet, it is possible that no resources will be discovered or the impact to your property will not be worth the trouble.

The importance of understanding your rights

Whether you own the mineral rights to your property may not always be a cause for concern, particularly for those living in urban or suburban areas. However, if you either become aware of resources on your property or a discovery is made later, you could financially benefit from ownership of the resources on your own land.

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Kelsey, Kelsey & Hickey, PLLC - Estate Planning

Kelsey, Kelsey & Hickey, PLLC
2225 E. McKinney Street
Denton, TX 76209

Phone: 940-387-9551
Fax: 940-387-9553
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