Would you buy land w/o mineral rights?

Would you buy farm land w/o mineral rights or royalties? and if so what would you pay for it?

The 3 I have found sold the land 57% less than the apprasied value.

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Permalink Reply by Mike h on February 15, 2012 at 6:07am

 

I might but I would be inclined not to. It depends on the lease terms and conditions and whether the mineral rights owner would be willing to assign certaain rights under the lease (for example, if the lease specifies that the lessor and lessee discuss placement of a pad, etc).

 

Some lease terms would be a deal breaker (for example the one I saw where the O&G company had the "right to use all water except for household water). What's a farm worth without water? I would probably explicitly require that the water rights transfer with the surface rights.

Mike

 

 

My basic attitude

Permalink Reply by Sarah on February 15, 2012 at 7:36am

Thanks those are all things I would not have thought of.

Permalink Reply by Mike h on February 15, 2012 at 8:03am

I'm thinking about the whole issue because there are a couple properties adjacent to our farm which are coming up for sale. My starting point was that I would never buy land with the mineral rights seperated. Then I thought about it as a business proposition and tried to break it up into discrete issues and what they mean in terms of impact and return on investment.

Permalink Reply by Sarah on February 15, 2012 at 8:12am

EXACTLY!!! at first I was thinking, heck no if no mineral rights...having the seller see that it's worth 50% less w/o mineral rights might be another story here.

Permalink Reply by Billy Park Whyde on February 15, 2012 at 9:16am

  If surface protection rights to the new owner could be derived from the lease why not?

 Land appreciates in value as there is no more in production. We know see bare land worth value in hunting that we never thought about years ago. Timber oh yes the stuff that grows with minimal assistance that can pay for the land depending on when it was last cut and the maturity of the timber. 

  Location is another aspect to consider. Could the land be used for a solar farm, a wind farm? If surface rights were protected possibly a Walmart location. 

 

Permalink Reply by Sarah on February 15, 2012 at 9:18am

w/o giving too much info it's bascially land locked, it would just be an addition to our farm land.

Permalink Reply by Paul Martinelli on February 15, 2012 at 9:11am

Yes.

 

I would if the price is right.....cheap recreational land is hard to find

Permalink Reply by Dan on February 15, 2012 at 9:54am

There has been some auctions in our area where they have the land and mineral rights being sold separate   and then together which ever brings the most. There are also some speculators buying land with minerals then re-listing the land with out the rights. It's easy to say you wouldn't buy land with out the rights, but it might turn next to imposable to buy land with rights . Good thing I'm done buying land.

Permalink Reply by Mike h on February 15, 2012 at 10:28am

Of course it's easy. I already have a chunk of land with rights. Like I said, it depends on the lease and a whole host of factors to come to a decision.

Permalink Reply by Rob Rotz on February 15, 2012 at 9:54am

i would as well,  chances are the new land would not get a pad but maybe just horizontally drilled under.  dont pay more than 2k / ac.

Permalink Reply by Carol Kuniholm on February 15, 2012 at 11:59am

You might want to watch Split Estate before you decide -http://splitestate.com/

Permalink Reply by Billy Park Whyde on February 15, 2012 at 12:37pm

 Sorry Carol I will not buy into your ant fracking nonsense. As other posters have illustrated land has value. Personally I would rather have 25acres or more of already leased land with surface protection than a $300,000 home in the yuppie section where they run your life! 

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