Mineral rights value rule of thumb
Mineral rights value rule of thumb
Do you want to know the mineral rights value rule of thumb? A lot of mineral owners are looking for a ball park estimate of mineral rights value. This free guide will show you how to figure out a mineral rights value rule of thumb for your situation. You may have noticed that you can’t seem to find any reliable information online. There’s a reason for that!
Mineral rights value is a secret?
When you sell your home, the transaction is recorded in public record including the sales price. This allows companies like Zillow to gather this information and let you search through it. This lets you quickly get an estimate about what your home might be worth. With mineral rights, this information does not exist! The sales are all recorded as public record so you can see who owns a property, but the sales price is not recorded with the sale. The deed will simply say, “$10 and other good and valuable consideration”. This keeps the prices mineral rights buyers pay a secret.
In addition to the fact that there is no public record of the sales price, even if there were, you wouldn’t be able to rely on it. The value a mineral rights buyer places on a property swings wildly from buyer to buyer. Two buyers can look at the same property and one will believe it’s worth $10,000 and another believes it’s worth $25,000. That’s not an exaggeration!
The rule of thumb for mineral rights value
So how do we figure out a mineral rights value rule of thumb? We have spent years talking to mineral owners and we have figured out a good rule of thumb for mineral rights value.
Non-Producing/Non-Leased Properties: If your property is NOT leased and NOT producing, you’re out of luck. There’s simply no way to even estimate the value. Your only option is to put the property on the market with a reputable company like US Mineral Exchange and see what offers come in.
Leased Properties (Not Producing) – If your property is currently leased but NOT producing, a good mineral rights value rule of thumb is 2x to 3x the lease bonus amount. For example, if you were leased for $1,000/acre, you could estimate the value at $2,000/acre to $3,000/acre when you sell mineral rights. Keep in mind that this is a very rough estimate. The real value could be far above this level or you maybe even lower. You won’t know until you sell mineral rights in Texas.
Producing Properties: If you are currently receiving oil and gas royalties income each month, we can get a much better estimate of the value. Unless the property is in the first 3 years of producing or in the last 5 to 10 years of it’s useful life, we can estimate value. A good mineral rights value rule of thumb for producing properties is 4 years to 6 years times the average check you receive. Take the most recent 3 months of check stubs, find the average, and then enter it in the first box below. This is your mineral rights value rule of thumb for producing properties:
Offer to Sell Mineral Rights in Texas?
If you want to know the mineral rights value rule of thumb because you have an offer, you’re not alone. We talk to a lot of people who get an offer to sell mineral rights and have no idea if it’s fair. Keep in mind that even if the offer you have falls in line with the estimate above, it still may not be the best offer. There are literally thousands of buyers out there. To ensure you get the highest possible offer, it’s extremely important that you get multiple competing offers. This allows you to make a smart decision. Selling to the first offer or two you get is almost never the highest price possible.
If you have an offer to sell mineral rights in Texas and you want to know if it’s fair, we recommend you list your property at US Mineral Exchange. Doing so will allow you to determine if the offer is fair. By listing your property online it will be seen by thousands of buyers. This creates competition for your property driving up the price and putting the most cash in your pocket.
Questions about mineral rights value rule of thumb?
Do you have questions about a mineral rights value rule of thumb? If you want to know more about how much your property is worth, fill out the form below. We can help answer your questions and get you headed down the right path.