From Tenants to Oil Wells: Why Royalties Caught My Attention

[Erwin Baquirin]

I’ve been around rental properties long enough to know that “passive income” can feel pretty active at times. Midnight maintenance calls, tenants moving out with no notice, vacancies, unexpected repairs—you name it. Don’t get me wrong, I love real estate, but sometimes the hassle makes you wonder if there’s an easier way to get steady cash flow.

That’s when I started learning about oil & gas royalties.

Here’s the short version: instead of collecting rent checks, you collect royalty checks from energy production. The operator (basically the “property manager” of the well) does all the work and pays all the expenses. You just get your cut of the revenue every month.

It honestly reminds me a lot of real estate, but without tenants, toilets, or turnover.

A few things that stood out to me:

• The income is truly passive—you don’t do anything after buying the interest.

• Payments come in monthly, just like rent.

• It’s a nice way to diversify outside of just rentals or stocks.

• Since energy prices can rise with inflation, the checks can sometimes grow when everything else feels tighter.

For me, royalties aren’t about replacing real estate, but adding another stream of income that complements it. If the idea of cash flow without roof leaks or evictions sounds appealing, it might be worth a look.

Curious—has anyone here invested in royalties before? How did it work out for you?