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Nov 4 / Jesus Dosreis

Advantages of Selling Minerals and Royalties

Royalties are the amount paid to the land owners in order to get the rights to develop land, extract minerals, including the extractions of oil and gas. The land owner can lease his land for the other companies for the development of minerals and gets a royalty in return for leasing his rights. The rate of the royalty depends upon the percentage of amount agreed by the two parties at the time of agreement. However, the land lord is not supposed to pay any costs for drilling and extraction expenses even though he is getting the royalty.

Many people sell the royalties and there are very few people who give them for lease. If any one opts for a lease he/she can enjoy the benefit of share until the mineral beneath his land expires , but nobody knows how much mineral is there and till how much time it can be extracted. But in case of selling ,the owner will get a lump sum amount which does not depend on the amount of the mineral and quality of the mineral. There are few more advantages of selling the royalties and let us see what they are.

  • You can get relieved from the cleaning up of your estate and you can effectively save your heirs from the complications of selling it.
  • With the lump sum amount you can safely invest in some other safer investments and can enjoy the benefits.
  • Selling the royalties at greater percentages will save you from the future fluctuations in the minerals prices.
  • You can pay off your high interest debts with that amount and can stay peaceful during the rest of your life.

However, it is advisable to take the advises of an attorney before moving forward in these selling and leasing issues.

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