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What are Storage Auctions?

Storage auctions are public sales of used goods held by the owner of a self storage facility for the purpose of resolving a debt. Though the concept has been around for some time, storage auctions received renewed interest thanks to popular television shows that follow the proceedings. However, there is more to storage auctions than meets the eye.

Why Storage Auctions Happen

Self storage is a booming industry in the United States. The industry as a whole generated an estimated $32 billion in revenue in 2015. This number has been growing steadily for years, and the trend is expected to continue. There are more than 54,000 storage facilities around the U.S. In 2013, around 9 percent of the American population was actively renting a storage unit.

Storage unitsStorage auctions can be a great way to buy and sell used merchandise.

Storage facilities typically charge a monthly rate to lease individual units. As long as the renter continues to pay the monthly fee, he or she is allowed access to the unit. Sometimes, renters will fall behind on payments for a variety of reasons. Renters may pass away unexpectedly without informing anyone of the lease on a storage unit. Others may fall on hard times and be unable to pay the monthly fee. Some may simply forget they were renting a unit and miss one or more payments.

If a renter defaults on a storage unit payment, individual state laws decide what exactly happens next. Each state's laws on storage units vary slightly, usually in the exact number of days' notice must be given, but follow the same general steps.

  • Default: Depending on the lease agreement signed by the renter, the unit will go into default between five and 30 days after missing the payment due date. Some storage facilities use a computer system that automatically locks a unit if payment has not been processed by the default date. At this point, a lien will be placed on the storage unit. This means the facility owner will be in legal possession of the unit and its contents until the debt is paid.
  • Notification: Once a renter defaults, the storage business will typically give him or her notice of an impending auction. The timeframe of this notice varies by state law. Storage facility owners will attempt to contact the renter by mail, email or phone.
  • Public notification: Depending on state laws and individual business policy, auctions of storage units can be scheduled between 30 and 90 days after the date of default. During this time, the owner of the facility must give public notice of the auction, either in a local newspaper or online.
  • Auction: The renter of the unit in default is allowed to pay their debt at any point up to the start of the auction. However, if they fail to do so or communicate in any other way, the owner of the unit will hold a public auction for the locker's contents.

How Storage Auctions Work

Storage auctions are frequented by a range of different people with unique goals in mind. Some in attendance are business owners who make a living buying and selling used furniture, appliances or other merchandise. Others may come simply for fun, or the possibility of finding rare antiques. In any case, there are a few rules which govern the proceedings of a storage auction.

Interested bidders will show up to a storage auction at the date and time listed in the public notice. Before bidding begins, the site owner will open the unit for bidders to inspect. Prospective buyers are usually only allowed to view the unit from the outside, and are not allowed to enter the locker or touch anything. Once everyone has a look, bidding will begin at a price determined by the owner. Some units will start as low as $1. The contents of the unit will be sold to the highest bidder. While the final price of a unit can vary, most sell for around $300.

Once the unit has been sold, the winning bidder has a predetermined amount of time to remove the items from the storage site, usually around 24 hours. Buyers will need to provide their own vehicle to transport the items. It is best to load all the items within the storage locker onto a truck and then move them to another site to sort through everything.

Tips for Buying at Storage Auctions

Although just about anything could be inside of a storage locker, it's unlikely that items of extraordinary value will be found. Stories of expensive antiques, cars or even cash have made storage auctions a thrilling prospect for some, but the vast majority of items bought in an auction will be miscellaneous objects which the previous owner didn't have room for in his or her home. That said, there are a few techniques to keep in mind when looking to profit from storage auctions.

  • Know your limit: The auction process is designed to entice bidders to act quickly without taking time to second-guess their decisions. Some may find it easy to get caught up in the excitement and bid more than they originally anticipated. Before attending an auction, pick a price limit and stick to it. Since you will likely need to bring cash to pay for a unit, only bring as much as you are comfortable spending.
  • Stick to your senses: Since you only get a brief, limited look at the inside of a storage locker, it's important to use every clue you can to estimate its value. Lockers kept neat and orderly, with boxes stacked and little clutter, might be worth more than one with items strewn about. If there are foul smells coming from the unit, that may be a sign of water damage or something else worth avoiding.
  • Have a plan: If you want to sell what you find at a storage auction, make sure you have a plan in place to do so. Many use websites like eBay, Amazon or Craigslist to sell their items to interested buyers. While Craigslist is free, eBay and Amazon do charge a small fee for every sale. More conventional options like classified ads or a yard sale may also work. Flea markets will also make it easy to sell second-hand merchandise, but will require you to pay for space.
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