Can I Strike It Rich? The Reality of Storage Auctions

Tim Schlee | Jan 31, 2014 @ 02:15 PM

It should come as no surprise that storage auctions are not as glamorous as depicted on popular TV shows such as Storage Wars. Whether that show is actually faked or not, it undoubtedly presents an image of storage auctions that, for all its excitement and cut-throat action, is incomplete.

In reality, there is a lot that goes into a storage auction, both before and after the bidding, that probably would not make for thrilling primetime television. That is not to say they are boring or unfit for media attention, but if you’re interested in pursuing auction hunting, it’s a good idea to know how they really work.

What Is a Storage Auction?

Storage auctions are generally a last resort for the managers and owners of a storage facility. They are not auctioneers by trade and often do not recoup their losses from unpaid rent even when they auction the contents of a unit. The legal obligations of a facility to contact a past-due renter vary by state, but they usually have to spend a considerable amount of time and effort mailing invoices and attempting to reach the renter before auctioning their belongings.

For the facility managers, auctions are simple business. On a good day, they make up the money lost on the past-due unit; on a bad day, they at least don’t have to pay for the unit to be emptied. Most state laws, however, restrict the facilities from making any profit on the auctions. If a unit sells for more than the value of its unpaid rent, the extra cash goes back to the delinquent renter. As one might expect, this has led to some instances of people trying to game the system, filling their unit with boxes for expensive items in order to make a profit.

Bidding on a Storage Unit

While state laws and facility rules vary from one location to another, there are a number of general guidelines for storage auctions that the interested auction hunter is bound to encounter. The most basic rules are as follows:

  • You need a photo ID to participate.
  • You can observe the contents of the unit for a short amount of time, but you can’t enter.
  • Bidding is not silent.
  • You must pay in cash, either immediately or within a very short deadline.
  • You have around 48 hours to empty the unit.
  • You pay a deposit that is refunded once the unit is emptied.

There are also restrictions on certain items found in a unit. Firearms are to be turned over to local law enforcement immediately. Vehicles are generally only able to be sold for parts since storage facilities are not in possession of the appropriate titles and deeds necessary to keep a vehicle for personal use. Personal items, such as photos and legal documents, are to be returned to the facility’s office, who will then attempt to return the items to their owner.

Winning a Storage Unit

It is no doubt every novice auction hunter’s dream to strike it rich on a unit, but even if there is money to be made on a unit, the work is far from over. Buying or renting a truck large enough to fit the contents of the unit is paramount. It’s a good idea to bring a lock to secure your unit while you make arrangements for the transport of the items inside. It can also be difficult to sell some of the items. Flea markets might find homes for much of it, but it often takes quite a bit of work to reach the best market.

Often there is only junk inside a unit. Not every unit is a winner, and even profitable units might have a significant amount of trash inside. Anyone truly interested in auction hunting should be aware of state and local garbage laws and dispose of their trash accordingly.

Where to Find Auctions

For some, even finding an auction can be a hurdle. Three common ways to find information about upcoming auctions are:

  • Legal notice postings in local newspapers
  • Contacting facilities to learn more about their schedule
  • Online databases and search engines

A new trend has developed in which some websites actually host the auctions themselves. Online storage auctions are not difficult to find, although the legality can sometimes get a bit fuzzy. Be sure to use a trusted website and facility and always be aware of local laws.

Making It Big

It takes a certain kind of shrewdness to succeed at auction hunting. It is helpful to remember that the stuff inside the unit was, most likely, not deemed important enough to save by the person who put it in there in the first place. Making money is possible, of course, but it’s a business, not a lottery. Unless you’re one of the lucky few who, for example, stumbles onto half a million dollars in gold coins.

A lot of time and effort goes into selling and disposing of the contents of a unit, and herds of novices inspired by the slick drama of auction hunting television shows have contributed to a drastic rise in prices. Expert auction hunters have a detailed knowledge of various markets. If you don’t know how much a particular item will sell for, then you definitely don’t know how much you should buy it for.

In short, the world of storage auctions is not as glamorous or dramatic as portrayed on television. But with a keen eye and a market to sell to, it can be lucrative. Have you ever bought a storage unit at an auction? If so, tell us about your experience in the comments below!