Are Mineral Rights Considered Real Property?

Eckard Enterprises | Eckard Enterprises

Mineral rights ownership can be complex and require a certain amount of expertise to truly understand. Many accredited investors accustomed to traditional real estate want to know whether mineral rights are considered real property in the same sense that an apartment complex or office building would be. It’s a valid question, since mineral rights differ from traditional surface real estate in a lot of ways. However, mineral rights are legally classified as real property. 

Mineral Rights are Real Estate Flipped Upside Down

By definition, real property includes the land and anything that is permanently attached to the land. This means buildings, roads, fences, bridges, trees, water, and minerals are all classified as real property. However, even though mineral rights are considered real property and a tangible investment, they can still be sold separately from surface rights. This complexity is one of the many reasons why it’s important to seek expert advice if you have any kind of interest in mineral rights. Contractual agreements regarding the sale, transfer, or lease of oil and gas minerals are extremely detailed, and laws vary from state to state, so be sure to seek out the appropriate education or expert guidance. 

Surface Rights vs. Mineral Rights

If you’re looking to purchase land, you can’t assume the mineral rights come along with it. It’s entirely possible for one person to own the surface rights and a different person to own the mineral rights. Owning surface rights simply means the owner can do whatever they want on the surface of the land in accordance with the law. Before rushing into an agreement thinking you’re purchasing a property's surface rights and mineral rights, your lawyer or other professional should evaluate the language in the contract to ensure you are the owner of both.

What Mineral Rights as Real Property Mean for Investors

Since mineral rights are recognized as real property, what does that mean for potential investors? The classification of mineral rights as tangible assets brings with it a sense of stability – it is an asset that is owned in perpetuity and can be passed down to future generations. With ownership in mineral rights, qualified investors benefit from a consistent stream of passive income from royalty payments, which can shield their overall portfolio from the volatility of traditional markets. In addition, they can enjoy the security and diversification that comes with ownership of real property. This makes mineral rights a unique investment avenue that not only has long-term benefits but also aligns with a tangible and time-tested form of wealth preservation.

Seeking Expert Advice

There are several benefits and considerations associated with owning mineral rights not listed in this article. We believe in the value of educating our clients and anyone interested in the world of oil and gas investing and asset ownership. Our team of experts includes geologists, engineers, and landmen, all with significant expertise in the industry.

Eckard Enterprises has 40 years of experience helping qualified individuals own royalty-generating energy assets such as mineral rights, which we believe are some of the most valuable long-term assets available. Reach out to one of our experts at [email protected] or (800) 527-8895 to learn more!