How Storage Auctions Work
The advent of popular cable TV shows like Storage Wars and Auction Hunters has spurred a newfound popularity for the storage auction business. This once quiet industry now receives thousands of more active participants, all of whom are eager to strike it rich by bidding on storage units. As a beginner, though, you may feel confuse regarding the process. The self-storage facilities rarely provide any information on how it works, adding further confusion for newcomers.
Why Storage Units Go Up For Auction
Self-storage facilities auction off units when the tenant fails to pay, as specified in the facility's contract. You have to remember that the storage facility -- not the tenant -- owns the unit. The tenant simply pays a monthly, quarterly or annual fee to rent the unit. If the tenant remains delinquent for X amount of days, however, the facility may auction off the unit's contents in an effort to recoup some of their lost revenue.
It's important to note that most states require storage facilities to list their auctions in a local newspaper circulation in advance. This is done as a way to announce the auction and create a fair environment for all bidders, as well as the previous tenant. With that said, some states allow storage facilities to list their auctions online instead of traditional paper newspaper. If you're thinking about entering the buy-and-sell storage auction business, you should familiarize yourself with your respective state's laws. Doing so will allow you to make smarter decisions, and it will help you locate storage auctions around your city/region.
Another legal requirement regarding storage auctions involves personal belongings. In most states, personal belongings (e.g. photos, identification cards, birth certificates, etc.) must be returned. Even if you're the winning bidder, you must still hand over these items to the facility, at which point they will then be mailed or shipped the tenant's last known address.
Anything Else I Should Know?
We could write an entire essay on the nuances of storage auctions. However, the best advice comes from past experience. It may seem daughnting at first, but after you gain some experience you'll eventually understand storage auctions and how they work. A typical auction consists of the auctioneer cutting the lock on an abandoned unit, at which point bidders are allowed to look at the contents (but not touch). The auctioneer then initiates the bidding, and the winning bidder is free to explore and take home the unit's contents.