Thinking about entering the buy-sell storage auction business? Self-storage facilities have auctioned off the property of non-paying tenants for decades in an effort to recoup some of their lost revenue. When a tenant doesn’t pay, the facility must wait X amount of days before it can legally auction off tenant’s property. Once this time frame has passed, an auction is held in which the highest bidder agrees to purchase the property.
Like all businesses, though, there’s no guarantee of success in the buy-sell storage auction biz. It’s not uncommon for some units to have minimal value in terms of property, and if you bid higher than what the property is worth, you could end up losing money. Thankfully, there are ways to boost your storage auction profits, which we’re going to discuss further in today’s blog post.
First and foremost, it’s important to note that bidders are typically prohibited from touching the property within a unit before bidding on it. The auctioneer will cut the lock, at which point all bidders will have a couple of minutes to look, but not touch, at the unit’s contents. You must use this time wisely to size up the unit’s contents and how much it is worth. Many seasoned auction hunters base their bids only on what’s visible. If you see $500 worth of property, for instance, you should bid no more than $500. This will ensure you walk away with a profit rather than going into the red zone.
Arguably, the single most common mistake first-time storage hunters make is getting into “bidding wars” with other people. A bidding war occurs when two or more bidders continue to raise their bids with the sole purpose of knocking the others out. When this occurs, there are no real winners, as the bids become so inflated that it’s difficult — or sometimes even impossible — to turn a profit. Keep your emotions in check and base your bids on what you can see, not what others are bidding.
It should go without saying that preparation is key to turning a profit in the buy-sell storage auction business. In other words, you should have a clear plan of attack, with a schedule of upcoming storage auctions in your area, as well as the location/address for these auctions. With this information in hand, you can create a day-to-day schedule for running your business.