If you’re not already familiar with the runaway hit reality TV series Auction Kings or Storage Wars, you’re missing on one of the latest entertainment and money making crazes: attending local storage auctions in order to bid on delinquent tenants’ forfeited goods for fun and profit. Storage auctions occur when a self storage company has several different units that are so far behind in payments that the company must enforce its legal right to place a lien on their contents. Just like auto mechanics that provide services on a car which go unpaid, the company can retain the goods and bar the tenant’s access to them until a rent payment is made in full. Should the delinquent tenant still fail to make a full payment within a set number of days (usually 45 days from initial delinquency to a lawful sale of the storage unit), the storage company may decide to hold a local public storage auction in your area.
The self storage company does this for a few different reasons. For one thing, the storage company has already lost a good deal of money on the delinquent unit. Storage companies rely on a certain amount of steady monthly income that they can use to pay their employees, repair the property and equipment, pay the property mortgage and pay for utilities like water and electricity. A late tenant means, in the eyes of a storage company, that someone is occupying some of the facility’s precious space, but not contributing any money towards profits and the operational costs of the company. Therefore, in addition to recouping some of their financial losses, the self storage company also wants to hold a public storage auction because it will result in that particular troublesome unit being vacated once the winning bidder collects its contents and empties it out. This means the company can finally turn around and rent this space to a new, and hopefully timely-paying customer.
When it comes to making a profit on storage unit auctions, the self storage company itself can only recoup as much as it is owed in delinquent rent. This means that if a delinquent tenant owes $600 in late rent payments, but their unit sells at auction for $4000, the company can only extract their due of $600. At this point, they actually have to cut the tenant a check for $3200!
Fortunately, the auction hunters and curious members of the public that show up to these storage unit auctions are not bound by the same rules. In fact, the amount of profit you can make on local storage unit auctions is only limited by your skill and the inherent value of the items you find inside the units you win. It takes many auction hunters a few go arounds before they are comfortable with the public storage auction process, but once you have the hang of it you can begin to get a sense for which auction units you want to bid on and which are not worth your time or money. There are many different tips and tricks you can learn to increase your chances of choosing a winning storage unit.
Once you have successfully outbid the competition on an auction unit, you have a limited amount of time to empty the unit in its entirety. You are now responsible even for the items you don’t want, so it can be helpful to bring some friends or family members along with a suitable vehicle or trailer for quick loading. Pay the auctioneer the amount you bid for, and then you’re on your way with a new bounty of items you can either sell at a yard sale or online using popular e-commerce websites like eBay.