If you are an ardent TV shows follower, you must have seen TV shows such as Storage Wars and Storage Hunters. These shows follow a group of individuals who earn a lot of money buying contents of abandoned storage units put up for auction. But what exactly are storage auctions, and how do these people make their money? If you are excited about storage auctions and want to learn more about them, you have come to the right place.
Are storage auctions worth it? The simple answer to this question is “yes if you do everything right.” While we can’t promise you a million-dollar fortune, visiting a storage auction is always an excellent opportunity to pick up a bargain or a vintage piece of history you won’t find anywhere else. However, making money with storage unit auctions requires hard work and patience. If you are not careful with what you do, you may lose a lot of money or get stuck with a lot of junk you cannot sell.
In this article, we discuss everything you need to know about storage auctions and whether they are worth it. Keep reading to learn everything you need to know.
How Do Storage Auctions Work?
A storage unit only goes to auction when the renter defaults on their monthly rent. This often happens when the rental unit owner dies, and the family doesn’t know about the storage unit, when the owner is fighting the divorce, or when they are experiencing financial hardship due to an unexpected life event such as a medical emergency.
If the outstanding balancing is not paid within a specific timeframe, the unit management will first lock the storage unit to deny the owner access then wait for a specific number of days to elapse before they auction the items to recoup some of their losses.
Typically, the number of days between delinquency to auction varies from state to state. In most cases, it will take anything between 30 days and 90 days before the items are auctioned.
Before the auction, the storage facility manager must send a mail to the tenant notifying them that the unit’s contents will be sold at auction if they don’t pay the overdue amount.
The storage unit management must then advertise the auction for at least two weeks providing general details such as the unit number, the exact date of the auction, reason for auction, and general description of the contents.
On the actual day of the auction, bidders will be given a quick peek at what is inside the storage unit but won’t be allowed to go inside. They must agree to bid based on what they can see from the outside and guess what else might be inside. It is a big gamble because the unit can be full of treasure or full of junk.
An experienced auctioneer will be ready on-site to manage the entire bidding process. Generally, a storage unit could sell for as low as $1 or as high as hundreds of thousands of dollars, depending on the number of bidders.
The winner pays an extra $100 or $200 to serve as a cleaning deposit. This amount is refundable as soon as you empty the unit and clean it properly. Keep in mind that if you win the bidding process, you become fully responsible for everything inside the unit.
What Can You Find In a Storage Unit?
Perhaps, a better question would be, “what can’t you find in a storage unit?” The truth is that your storage auction is primarily based on guesswork and pure luck. Even if you are allowed to peek into the unit before bidding starts, you can’t tell for sure what is hidden inside.
What you read online will mostly be stories of storage auction bidders who have found priceless treasures and even boxes of cash stashed in the units they win. Others have found racks of designer clothes, estate jewelry, antiques, celebrity memorabilia, and even crates of expensive wine.
However, for every tale of hidden treasures you read, you need to keep in mind that there may be hundreds of tales of woe that you won’t get to hear because people love talking about their success and not failure.
In some cases, all you find in an abandoned storage unit are worthless documents, broken bicycles, junky silverware, and torn clothes.
But the biggest secret to earning money with storage auctions is knowing where to resell the items at a reasonable price.
While some items may be everyday items that, at first glance, don’t look like they are worth a lot of money, you can always fetch a reasonable amount of money if you sell them in the right place.
Once you have a few storage auctions under your belt, you can make reasonable income or even full-time income from the hustle.
Where Should You Resell Storage Auction Items?
A significant number of people who take part in storage auctions say that eBay is their go-to outlet when looking to sell unusual items. Something about this worldwide platform makes it an attractive option for people to sell odd or rare items.
However, if you find an item that still has a barcode, consider listing it on Amazon because it can fetch you a relatively higher amount of money.
Other items should go on your Facebook business page or Craigslist to target local buyers. You can always find an equivalent of Craigslist, depending on where you live.
For items, you can’t keep for yourself or sell, consider donating them to people who may want them.
For personal documents such as tax documents, family photos, and so on, you will be given the contact details of the previous owner so you can link up and deliver the items to them if you think it is good to do so.
How Can You Make Money from Storage Auctions?
As mentioned earlier, it is possible to make a decent income out of storage unit auctions. However, it is not as easy as reality TV shows portray it.
You need to understand the entire process and, more so, the bidding process. Attend several storage unit auctions to watch and learn without bidding. See what the entire process is like and what the experienced guys bid on and avoid.
Pay close attention to what the bidders bring with them to make the process easier. After the auction, approach the winner if possible and ask them what they will do with the storage unit contents.
Ask them if they feel like they have overpaid or got a good deal. Talking with some of the seasoned bidders will make your learning curve short and help you avoid some of the common mistakes.
Before you start bidding yourself, have a solid plan in place. Know how you will move out the stuff within the shortest period and how you will conduct sorting.
In most cases, new bidders get caught out in the bidding process and end up winning a storage unit even before they figure out how they will handle the contents.
Keep in mind that if you are caught up with time before you clear the storage unit, everything remaining forfeits to the storage facility automatically unless you renew the monthly contract to buy some more time.
Have a clear plan in place before you attend the auction, or you will end up spending much more money than you had anticipated.
Figure out in advance where you will put the stuff, how you will sort out everything pretty fast, how you will move the items and where you will get the truck to get out the items.
Can I Bid Online?
Storage auctions are slowly moving from traditional in-person auctions to online auctions. This is a benefit for many people because they can still focus on their full-time jobs without worrying about attending an in-person auction.
With an online auction, you can take a couple of hours off without traveling and place your bid online. Online storage auction sites make it relatively easier to assess each unit because the facility is responsible for taking photographs of the abandoned units and posting them on their website.
But you should never trust the pictures 100% because they don’t tell the whole story. Sometimes, online auctions are much like a treasure hunt- a roll of the dice.
Like in-person auctions, take time to learn as much as possible about online auctions before you start bidding. You may make a few mistakes, but things click up once you figure out how things work in the online auctions.
While storage auctions are a worthwhile adventure, they are not a get-rich-quick scheme or an easy way to earn money. To be successful, you need to put in a lot of work and understand the risks involved in the entire process.
But it can still be a great way to earn a decent side income once you gain the relevant experience and build relationships with storage facility owners, auctioneers, and other people who can help you make informed decisions.