Standing Out in Ohio Podcast
Brought to you from Ohio based home inspection company of Habitation Investigation. Information helpful to agents and buyers. Conversations with professionals and entrepreneurs regarding their stories and what makes their companies and themselves stand out and gain competitive advantages. Listen to stories from Ohio real estate agents and related businesses to help you know how to improve and who to consider using for yourself or friends. Created by the owners of a highly rated home inspection company in Ohio and the Winners of Best Home Inspection Company in the Midwest https://homeinspectionsinohio.com/
Standing Out in Ohio Podcast
Digging Deeper: What Every Rural Property Buyer Needs to Know About Mineral Rights
Ever wondered who actually owns what's beneath your feet? In our latest episode, we dive into the world of mineral rights - a concept that can dramatically impact rural property owners but is often misunderstood or overlooked during the buying process.
When we purchased our land about four years ago, understanding mineral rights became critically important. We share our personal journey and explain exactly what these rights entail - essentially determining who has legal access to valuable resources like oil, gas, and coal underneath your property. The implications are far-reaching and sometimes shocking: companies that own mineral rights can literally come onto your land, tear down trees, create access roads, and dramatically alter your property without your permission or approval.
The financial aspect is equally eye-opening. We break down the potential value of mineral rights, which can range from a few thousand dollars to over $25,000 per acre or even $1 million for high-potential properties. While these figures might tempt some landowners to sell, we discuss the devastating consequences we've witnessed firsthand - from properties transformed into strip mines to pristine land reduced to barren dirt pits.
For anyone considering rural property ownership, this episode provides crucial knowledge about what questions to ask, what to look for in disclosures, and why we personally would never purchase land without mineral rights. Whether you're a current homeowner or prospective buyer, understanding these often-overlooked property rights could save you from making a costly and irreversible mistake. Subscribe now and gain the knowledge to protect your investment and preserve your land for generations to come.
To learn more about Habitation Investigation, the Three-time Winner of the Best Home Inspection Company in the Midwest Plus the Winner of Consumer Choice Award for Columbus Ohio visit Home Inspection Columbus Ohio - Habitation Investigation (homeinspectionsinohio.com)
NBC4 news segments: The importance of home inspections, and what to look for | NBC4 WCMH-TV
Advice from experts: Don’t skip the home inspection | NBC4 WCMH-TV
OSU student’s mysterious symptoms end up tied to apartment’s air quality | NBC4 WCMH-TV
How to save money by winterizing your home | NBC4 WCMH-TV
Continuing Education for Ohio Agents Scheduled classes
Continuing Education for Ohio Agents Course lis...
Habitation investigation is the way to go for a home inspection in Ohio. Trusted licensed home inspectors for your needs. From radon to mold to warranties For a great home inspection, you really can't go wrong. Visit HomeInspectionsinohiocom.
Speaker 2:Hey everybody, welcome to Standing Out in a Hub podcast. This is Jim and Laura the office. Goddess is with me.
Speaker 3:Hello everyone.
Speaker 2:All right, laura. All right. We bought land about four years ago. Yes, maybe four and a half years ago now.
Speaker 3:Oh, maybe Something like that. Yeah, something like that.
Speaker 2:So what I didn't? I knew it was a thing, but I didn't really quite understand because, living in a little city where I grew up, we didn't have to deal with mineral rights.
Speaker 3:My first question was do we have the mineral rights? And you're like what do you mean?
Speaker 2:Yes so. So let's, talk about that mean yes, so so let's talk about explain what mineral rights are, because I don't like the. I kind of understand the concept of it, but I don't know why you'd give them up totally I never got that either.
Speaker 3:So, for example, let's say um, we'll talk about property. Where I grew up, that was above us. They had a huge tract of land. They sold their mineral rights to a coal company for a shit ton of money.
Speaker 2:Well, how much money are you talking about?
Speaker 3:It was quite a significant amount, like thousands upon thousands.
Speaker 2:Okay.
Speaker 3:And that whole area became strip mined. And that whole area became strip mined, that whole area became a dynamite blast zone, which is actually, ironically, why our wells ended up collapsing, because they were putting off blasts that were not supposed to be put off. They were too strong, like coal, like gas oil, things like that that you sell to a company and then you give them the right to come onto your property and monitor that. You lose those rights when you sell those. They stay with that company that has purchased them, so you can't just like so like, let's say, that place up above me where I grew up, when they went to sell that property. Eventually there would have been no mineral rights with that, because that was all still with the coal company to to be able to mine all of that so basically sold off the land for them to come in and do whatever in the hell they wanted to.
Speaker 3:It totally tear it up.
Speaker 2:Yes, dig down and then, when they're done, like all right, here's your land back yeah, pretty much, and you have no say.
Speaker 3:They can come in at any point in time, they can do anything they want. You have absolutely no control over any of that when you give up your mineral rights, which is why it is so important if you are buying property in the country, you need to find out about the mineral rights, you need to find out what the mineral rights, you need to find out what the exceptions are to those, if there are any, and you need to make sure that you are comfortable with that and okay with that. So for me, I wasn't. I didn't want anybody to have any rights to my property. I didn't want anybody to have the right to come up. The only thing we did was we gave a right of way to the electric company to be able to follow their electric up here and keep track of that line yes, yeah, well, we got a transformer right comes up the property and then it's.
Speaker 3:I don't know how far is that it was from the house 30, 40 yards maybe from the house there's a transformer, so that, that's their line, right that's that's their line, that they maintain that that's that's all them. So we had to sign the right over for them to be able to come up and check that out. But that's different access, which which they don't have mineral rights to, that they don't have mineral rights, but they have the right to be able to come up and maintain and take care of the line, and they don't have to notify us of that.
Speaker 2:Okay, that's my understanding, yep.
Speaker 3:So that is different than giving away your mineral rights. If you have oil, if you have gas, if you have coal on your land and you give those up, they can literally come in and they can tear your land up and they can totally destroy it and you can't say squat about it. So you need to make sure that if those are actually not with the property you're buying, where they're at in the stage what are the plans and you need to follow up on that or you need to walk.
Speaker 2:Well, there's something here called producing mineral rights. Well, there's something here called producing mineral rights and it says, for properties generating royalty income, values often estimated at three to six years of current royalty income. For example, if you receive $100 per month in royalties, the value might range from $3,600 to $7,200 for like 36 to 72 months.
Speaker 2:However, if future drilling potential exists, offers can be significantly higher, sometimes exceeding $25,000 per acre or even $1 million for a high potential property. So this is more for, like, oil or natural gas drilling. Yeah, so I have inspected houses that have a well in the backyard.
Speaker 3:Well, yeah, an oil.
Speaker 2:Well, um, you had some that had a gas line, so I remember the I was. I think I was with you on a couple of those and one lady that had a gas line I think I thought it was the one producing the gas. She did not have natural gas at her house. She couldn't. She was like why can't I get my that's?
Speaker 3:a really good question, that's a question I asked them.
Speaker 2:I mean that that line there probably has way too much pressure to be able to take it to your house.
Speaker 2:But they could put a regulator but they're not going to take this. And it was a pretty good size pipe, 18 inch pipe. They're not going to tap into that to get natural gas, just to you, but somehow they had rights for that pipe going across. So she did not know anything about mineral rights. My, I told you ask about that. I'm not really certain about it myself. I know you basically sell or you get a percentage of what they're producing every month as income right but sometimes they can do whatever the heck they want to, and I don't know what their contract is?
Speaker 3:it only limit.
Speaker 2:Hey, you only this one strip back here, or because I doubt they would mineral rights do not go to a strip is my understanding.
Speaker 3:It goes to that property. Now I may be wrong.
Speaker 2:That may have changed because it's been changed because there's no way that you would, I hope, a mineral, let's say oil drilling, We'll say gas, We'll say natural gas. I don't think that. Hey, they got mineralized this property. They can come tear your house up because there's gas underneath it.
Speaker 3:No, they won't touch it. It's the land, so it's not the entire property. They're not going to come and damage your house or destroy that, but they will come and they can literally like tear down trees.
Speaker 2:There's criteria what of areas they can do.
Speaker 3:I'm sure you put that in a contract but some people may not, you know, like they're just looking at the money maybe, and just okay, well here, I'm not going to stay here forever. Anyways, take them and they, they don't know what they've given up, like that, the, the places that I'm talking about, that sold mineral rights. Everything was gone, like just completely and totally gone.
Speaker 2:there were no trees, there was nothing that like it was just completely a loss. It was sad.
Speaker 3:So, yeah, they just turned into a dirt pit yeah, pretty much yeah a dirt pit with a little lake in it, because for some reason they needed the runoff water from something and I don't know it was a cool thing.
Speaker 2:It kind of turned into a stone quarry.
Speaker 3:Kind of yeah.
Speaker 2:Maybe down the road they can turn that into a little swimming hole and then have liability issues for people swimming in a quarry.
Speaker 3:But yeah, I've known a couple of people that have sold sold mineral rights in Pennsylvania and just like shit ton of acreage and it just damaged everything.
Speaker 2:Yeah.
Speaker 3:It was sad.
Speaker 2:So yeah, they can do whatever they want. So hopefully there's more regulations on like hey, if you're, if you're selling the rice to I don't know, would forestry be about the same thing? It's not mineral rights, you're selling the-.
Speaker 3:You're selling the timber and there would be a Timber. If you're doing that, my understanding with that is that there are specific timbers that they're looking for and they would look at specific trees. It wouldn't be a clear cut of everything.
Speaker 2:Clear cut. I do not like clear cutting.
Speaker 3:I don't either, so I do not like clear cutting.
Speaker 2:I don't either, so I do know some trees can be quite valuable.
Speaker 3:Walnut is one. You can get paid a lot of money for very old walnut trees.
Speaker 2:Well, I think they make gunstocks out of the roots that's one of the things that they do with that, but anyway, if you're buying a house, selling it.
Speaker 3:Well, if you're selling it, you probably would be glad they don't.
Speaker 2:You should tell the people, hey, they have mineral rights. That should be in all the paperwork.
Speaker 3:That needs to be in all the paperwork. That would be a disclosure issue. If I bought a property and it was not disclosed to me that I did not have mineral rights, I would be livid.
Speaker 2:Oh yeah, so I am seeing here that, unlike real estate, there really aren't comparables. It's all private Right. Values can range from $50,000 to over $20,000 per acre.
Speaker 3:Yeah.
Speaker 2:So it all depends on where you're at, what you have and how badly some company wants that or needs it?
Speaker 3:So, like Pennsylvania, coal was a big thing there. That was a big thing to sell off were mineral rights for coal.
Speaker 2:And here.
Speaker 3:I think it's more like oil and gas is what I've seen.
Speaker 2:Oil gas. There used to be a lot of mining down in this area. I don't that's happened so much, but we definitely have a timber, oh clay. They mined clay from our property years ago years ago and I, yeah, I kind of see, I kind of think I guess where they may have done it. Yeah, I've seen somewhere that was such a long time because we got fully mature trees and those those areas now, those areas now. Yeah, so it's all been taken back over by nature.
Speaker 3:Yeah, I can't remember when the there used to be a brick factory here and they did the clay for the bricks, so I'm not sure when the brick factory closed up.
Speaker 2:But yeah, it would probably have been around that time when it finished. I don't know if that was Ohio brick.
Speaker 3:There was a brick company in nelsonville ohio. There's one here in mcarthur too.
Speaker 2:I see the sign for it like I don't remember when that one went out, but what I was told was that it was for that company gotcha. Okay, well there's. I hope that helps explain a little about mineral rights. If you are a home buyer and you're buying something out in the country, yeah, yeah, learn about the mineral rights. Make sure you have access to those. Or, if you don't have full mineral rights, make certain that you're okay with what's going on with that.
Speaker 3:Or at minimum you're getting some type of money for it, and if you're not, I genuinely I would walk.
Speaker 2:Yeah. So here's the question, Laura. Okay, let's say I own land, I sold the mineral, yeah. So here's the question, laura. Okay, say, let's say I own land, I sold the mineral rights. I'm getting money for it. I sell the property to you. Do you start getting that money now?
Speaker 3:I should yes, because that should transfer with the property.
Speaker 2:What if I didn't tell the company I sold the land?
Speaker 3:At some point they're going to find out when Joe Schmoe comes out with the shotgun going get off my land. And they're like, well, we've got the mineral rights. And he's like, no, you don't. And he kicks them off.
Speaker 2:Because at some point and then that could be a lawsuit between Because that's not been a disclosure.
Speaker 3:That would be a disclosure issue Because they tried to keep the money.
Speaker 2:You know that people are like I'm not telling them I'll get this money coming in for like a year until they finally settle it and then he goes. At that point I'll be out of here I.
Speaker 3:I think that would bite them in the butt way harder than they think it would maybe, maybe and if not, it should, it should it.
Speaker 2:Should disclosures are important? Should Disclosures Are important? Yes, they're definitely important. So I think that's about it on this one. But yeah, mineral rights makes certain you understand those and how they apply to your, I guess, rural property. Does anybody sell mineral rights in a city? I don't think you're in a space. I don't think you're allowed to.
Speaker 3:Yeah, I don't think you're, you're in a space. I don't think you're allowed to. Yeah, and what, what company is going to come in?
Speaker 2:and you've got like a little five acre spot and you know what are they going to do, mine, that or no, they can't do anything with that Cause you're.
Speaker 3:you've got all these other places around. It's more of a rural area because they need that room. They need that room and they like, just come in and like I I said, they'll just tear down trees to get to wherever they need and you have no say in what comes down. Like you're, you're, you've given up that right yep, that would be why I would never buy a place without mineral rights.
Speaker 2:But that's, that's just me nope, I'm with you on that one.
Speaker 4:So all right, everybody, thank you bye guys you've been listening to the standing out in Ohio podcast. Be sure to subscribe on Spotify or Google Podcasts to get new, fresh episodes. For more, please follow us on Instagram, twitter and Facebook, or visit the website of the best Ohio home inspection company at homeinspectionsinohiocom or jimtroffcom. That's J-I-M-T-R-O-T-H and click on podcast Until next time. Learn and go do stuff.
