Thinking about entering the fun and exciting (and lucrative) world of storage auctions? If so, you’ll need to first familiarize yourself with the process of how it works. Only then will you be able to turn this idea into a functional business practice that generates revenue.
Self-storage facilities typically “rent” their storage space to tenants, charging either a monthly or annual fee. If the tenant fails to pay, the facility will send him or her a notice. And if the tenant remains delinquent for a prolonged length of time (varies depending on state and local laws), the facility has the authority to auction off the contents of their unit in an effort to recoup their losses. This, of course, is where the storage auction business is borne.
Storage Auction Bidding
Most jurisdictions require self-storage facilities to notify both the tenant and the public about upcoming auctions. Granted, the tenant cannot always be reached, in which case the facility must send a notification to the tenant’s last known address on file, asking him or her to come and pick up their belongings or else they’ll be auctioned off.
When it’s time for the auction to take place, the auctioneer will cut the lock on the abandoned unit (assuming it contains one), allowing all of the registered bidders to peek inside. It’s important to note that bidders are not allowed to touch the contents of the unit, rather they can only look. This is arguably the single most important stage of the storage auction process, as bidders must use this time wisely to determine about how much the unit is worth. We’ve talked about this before on our blog, but one solution is to base your bids off what you can see. In other words, if you see $500 worth of items, you should bid no more than $500 to remain profitable.
Cleaning it Out
Once the auction is over and the winning bidder has been chosen, that person must now clean out the unit. Most self-storage facilities have strict rules requiring the winning bidder to clean out their units within 24-48 hours; otherwise, they could be charged a cleaning fee. This includes both items of value as well as items of no value. So even if there’s trash and empty boxes present, you must still clean it out. Hopefully, this will give you a better idea of how storage auctions work.