5 Reasons Property Rights Are Reliable Investments in this Volatile Market

5 Reasons Property Rights Are Reliable Investments in this Volatile Market

Land and mineral rights ownership exposes investors to royalties from all types of resources including minerals, water, solar, wind, and cell towers, which can be summarized as property rights. In times of volatile stock markets, it is best to invest directly in the land and mineral resources in the United States. Investments in property rights are safe (tangible assets), diversified (several resources), and pay big (large return on investment).

In this blog, we’ll take a look at 5 key reasons why property rights ownership is an ideal investment. 

Background

Since both surface and minerals can be owned in the United States, both property types can carry significant value with potential revenue exposure to multiple energy resources. Minerals can include traditional oil and gas, but also rare earth materials used to produce modern batteries. Surface rights can be leased to resource companies for uses including water, solar, wind, cell towers, pipelines, hunting & fishing, air rights, and many other purposes. Investors can buy specific property rights without the necessity of owning raw land.

1) Returns

The property rights sold on the LandGate marketplace can generate up to 70% yearly rate of return and the future cash flow estimates are over 30 times the purchase price. These massive returns are significantly higher than other investment vehicles.

2) Diversification

Owning property rights exposes the investor to several avenues of income. Investors can purchase specific property rights such as wind, solar, or water rights, and receive revenue from energy companies for these projects. Mineral owners can receive royalties from traditional oil and gas production, or from the mining of rare earth metals to make modern batteries.

As an example of a specific property right, water rights have seen an increased interest by growing communities. In some areas, a water right can be bought or leased from a farmer. In Colorado, the demand for water has grown so rapidly that the cost for a unit of water has sky-rocketed up to $30,000 per unit. 

Big Thompson Water Project

Source: KUNC.Org

3) Tangible Real Estate Asset

Market stocks are volatile and can crash. Property rights are tangible real estate assets offering stable pricing amid market volatility. The tangible nature of property rights gives investors a level of confidence that their asset is safe and secure. Property rights are a distinct asset class where returns are driven by growing economies while being largely protected against major market swings. 

4) Tax Savings

Property rights ownership can offer huge tax advantages. Mineral owners can write off depletion on royalty payments that can make them virtually tax free. There are several deductions, write-offs and tax advantages available to investors in minerals or specific surface rights. Investors can also buy property rights with a 1031 exchange by deferring the capital gains from the sale of other properties.

5) Inheritance and Perpetuity

The great thing about owning property rights is that you own them forever. Property rights provide very good short term royalties and lease revenues and their value increases over time as more resources are explored. The rights are passed on to family or beneficiaries through the estate as valuable assets. Many clients come to LandGate having inherited property rights and are surprised by the value they can receive by selling or leasing those rights to energy companies. It can be a welcome surprise for generations to come.

LandGate is a property rights marketplace where land rights can be leased, sold, or bought. Each listing has a robust economic valuation for an informed and safe investment. Our team of professionals assists in ownership verification and title work, making the entire transaction very easy for the first time investors. Visit www.LandGate.com for more information.

Visit our map to browse current listings, or call us at 855-867-3876 for more information.

 

Nothing in this Blog constitutes legal, financial, or investment advice. LandGate Website and Blog contain data and information obtained from public data, third parties, and internal company analysis of such data and information. LandGate has not independently verified the data and information obtained from these sources. All market data contained within LandGate website should be considered as a reference only and not as validation against. Forward-looking information obtained from these sources is subject to the same qualifications noted above. The contents of the site may contain forward-looking statements that are based on management’s beliefs, assumptions, current expectations, estimates, and projections about the oil and gas industry, the economy, or its investments. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence. Therefore, actual results and outcomes may materially differ from what may be expressed or forecasted in such forward-looking statements. Furthermore, LandGate undertakes no obligation to update, amend or clarify forward-looking statements, whether as a result of new information, future events or otherwise.
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