storage auctions are they a bargain investment
March 28th, 2013
If TV shows like “Auction Hunters” and “Storage Wars” are to be believed, bidding at a storage auction is an exciting way to make a lot of money in a short period of time. While it’s possible to strike gold, it’s unfortunately not always the case.
Have you ever had a storage unit? Think for a moment about what you kept there. If someone had bid $1000 for the contents, would they have come out on top or with boxes of childhood drawings and pots and pans to haul to the dump?
Part of what makes these shows so appealing to viewers, apart from the get-rich-quick dreams, is that participating is actually possible for anybody. Storage auctions are a regular occurrence in every city in the country, meaning that anyone who wants to try bidding need only to locate an auction and show up with the means to pay. Before heading out to try your luck, however, it’s a smart idea to understand a bit of background on the concept of auctioning storage units.
Why do storage auctions occur?
Just as a tenant who fails to pay their rent would be evicted from a house or apartment, a storage unit renter who doesn’t pay their monthly fee risks the removal of their unit’s contents. Laws vary by state about how long this period of time can be, but it’s often around two to three months. After attempting to notify the tenant and placing advertisements about the auction in local media, a unit owners’ legal recourse to recoup the lost rent is to auction the contents of the unit.
Preparing to attend an auction
Before bidding at a storage auction, it’s a good idea to attend one to understand the process. Although some auctions only allow registered bidders to enter the facility and view the units, you’re never required to actually place a monetary bid (in some cases you may be required to technically bid $0) on an individual unit. Keep in mind that many of the people who attend these auctions are professionals who have connections with flea markets and pawnshops, so they already have an idea of how they’ll unload the items they purchase.
To find storage auctions in your area, start by calling the facilities closest to your home. Most sizeable places have an auction about once a month, so you likely won’t have to wait long. Bring a flashlight to see into the units (you’re not allowed to enter) and enough cash on hand if you plan to make a bid.
Because you can’t enter a storage unit before bidding on it, the process is, in essence, intelligent gambling. Of course, there are clues to what’s in there, but placing a bid relatively sight unseen can be a risky venture. A good bet is to look for units packed neatly instead of one with junk sloppily thrown in. While the temptation may be there to bid on junk in hopes of finding something a person didn’t realize they had (a first edition Superman comic book worth $1 million, for example), you’re better off betting on the person who takes care of their belongings.
Among the most common items of value found in units are electronics, power tools, appliances, and furniture. Only place a bid if you’re confident you can resell those types of items, and remember that you’re required to empty the unit within 24 to 48 hours, depending on the facility’s rules. If you don’t have access to a truck or a place to put the contents of the unit, don’t bid on it!
If you do win an auction, you’ll need to pay on the spot, so be prepared. Just remember not to bite off more than you can chew and to be patient and smart.
When done carefully (and with a good bit of luck), it’s possible to turn a handy profit from storage auctions. Just remember not to spend money you can’t afford to lose.
Storage auctions can be a frugal investor’s best friend, but you shouldn’t throw your last dime into anything that’s not a sure bet!
With a Bachelor of Science in Marketing from the University of Utah, Garret Stembridge joined Extra Space Storage where he is a member of the internet customer marketing team. Extra Space Storage operates self storage facilities in 34 states and hundreds of cities, including a Union self storage location.
If you enjoyed this post, make sure you subscribe to my RSS feed!