Whether you’ve binge-watched “Storage Wars” or “Auction Hunters,” you may be tempted to bid at storage unit auctions yourself. It could be a profitable side hustle, but there is some risk involved.
A storage unit auction occurs when a unit renter has failed to pay their storage fees for a certain period of time. The storage facility sells the entire unit as-is, and the buyer can only do a visual scan from the outside. In some cases, the buyer is able to get a unit full of treasures at knockdown prices. In others, they buy a unit of junk. That’s the fun (and the risk!) of storage auctions.
If you’re ready to take the plunge into the world of storage auctions and learn how it works, here are the steps to getting started.
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1. Find an auction
Storage auctions, also known as lien sales, occur at self-storage facilities. When a unit renter doesn’t pay their monthly rent for a certain period of time, the storage facility can put a lien on the property. If the tenant doesn’t respond or pay within the state-required notice period, the storage facility can legally sell the contents of the unit.
How long tenants have to pay before their items are auctioned varies by state lien laws and storage facility policy. For example:
New Hampshire: In New Hampshire, tenants are in default if they’re late 30 days or more. The storage facility must send the tenant a notice of the default and intention to sell the storage unit contents. The renter has 14 days after receiving the notice to pay the owed rent and late fees. If the renter doesn’t pay the necessary amount, the storage facility can legally hold an auction for the unit’s contents.
Florida: In Florida, the timeframe is shorter. The unit is in default after payments are just five days late. Storage facilities must send the tenant notice that the unit will be up for sale if they don’t pay within 14 days. After 14 days, the facility must publish an advertisement in a newspaper once a week for two consecutive weeks. After 15 days of the notice being placed in a paper, the auction can occur.
Auctions are in person or online. To find auction listings near you, check the classifieds of your community or city newspaper, contact local storage facilities such as Extra Space Storage or Public Storage, or search online through the following sites:
2. Register for the auction
Self-storage unit auctions are open to the public. To bid, either in person or online, you typically need to be at least 18 years old and have a valid photo ID. Contact the storage facility or site to find out how to register ahead of the auction. With most online auctions, you can register via their websites by creating a profile.
3. Bid on a unit
Once you’ve found an auction you’re interested in, you can prepare to bid on a unit. Keep in mind that you cannot bid on individual items. You can only bid on the contents of the entire unit. Exactly how auctions work are dependent on whether they’re in person or online, but with both, the unit goes to the highest bidder.
Live auctions
If you attend a live auction, you’ll want to dress comfortably and be prepared to spend several hours walking around the facility and inspecting units. You won’t be allowed to enter the units, but you can visually inspect them from the outside. It’s a good idea to bring a flashlight to look at the units.
Bidding happens quickly, so it’s a good idea to set a budget for yourself and stick to it. Start small when you’re just starting out until you gain experience with reselling units.
You often have to pay in cash at live auctions, so be sure to have bills on hand and not just a credit card.
Online auctions
Online storage auctions are a bit different. If you’re bidding on an online auction, you’ll want to do your research ahead of time by reading the descriptions of the units and looking at any available photos.
If any larger items are visible in the photos, such as furniture or electronics, see if you can look up those items’ brands to find out what they typically sell for secondhand. Unfortunately, the listing may also be vague, just listing “totes,” which doesn’t give you much to go on.
With online auctions, you can pay with credit or debit cards, or you may need to make arrangements to pay cash in person. Some online auctions charge added fees. For example, StorageTreasures.com charges a 15% fee (10% for Pro members). You may also need to pay a refundable cleaning deposit.
4. Clean out the unit
You had the high bid on a unit and won, congratulations! Now comes the real work. After winning an auction, you have a limited amount of time to clean out the unit and haul away its contents. Depending on the storage facility, the typical time is 24 to 72 hours, so you may need help moving large or heavy items and a large SUV or truck.
When you start emptying the unit, be sure to wear gloves and a mask to protect yourself from any dust or debris. If you come across any hazardous materials, such as cleaning chemicals, poisons, or flammable liquids, be careful handling them and contact the appropriate authorities for guidance on how to dispose of them.
Warning
You may be required to return personal items such as photos or legal documents to the facility manager. You may also be required to turn firearms over to law enforcement.
5. Sell your finds
If you’re wondering how to make money on storage auctions, it all comes down to your ability to resell your finds.
Once you’ve cleaned out the unit, go through the items and see if any of it is valuable on the resale market. Depending on the items, you could use the following sites to sell your unit contents:
Gazelle: If you find used electronics, cell phones, or computers, you can resell them on Gazelle.
Craigslist: Craigslist is a good place to sell large items, such as furniture.
Facebook Marketplace: Like Craigslist, Facebook Marketplace can be a useful tool for selling furniture and electronics.
Poshmark: If the unit has clothes, shoes, jewelry, or handbags, you can sell those items on Poshmark.
eBay: For other items, such as toys or collectibles, eBay can be a great way to reach buyers nationwide.
If there are items in the unit that you aren’t sure what their value is, consider consulting with an expert. The value of some items, such as coins or baseball cards, can range from a few cents to thousands of dollars, so getting an expert opinion can be invaluable.
FAQs
How do I find local storage unit auctions?
You can find local storage auctions online at StorageTreasures and StorageAuctions. Or, you can find local, in-person auctions by checking the classifieds of your area’s newspaper or visiting the websites of local storage facilities.
What is the average profit margin on a storage auction?
Average profit margins on storage unit auctions are hard to calculate. For every unit that produces high profits, another could be a complete loss. That’s why it makes sense to start small and bid low until you’re more experienced and effective at spotting a bargain.
What are the risks of bidding on storage auctions?
With a storage auction, you have little information to go on before making a bid. A unit that looks promising could have nothing of value, and you may incur costs to haul away the junk — on top of the money you bid — causing you to lose money.
Bottom line
For individuals who love the thrill of the hunt and are willing to take on some risk, storage unit auctions can be a great way to earn extra cash. Before diving in, research the process and understand the risks. That way, you’ll be in a better position to spot a bargain and make some money. When you’re ready to get started, check out local auctions or bid online.
If you’re looking for other ways to make money, check out the best side hustles of 2022.
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This article How to Make Money With Storage Auctions originally appeared on FinanceBuzz.
