By law, when a storage facility customer stops paying for a unit, the facility must auction the contents of the unit to pay (or help pay) for the amount owed. By requiring an auction, these state laws help ensure that a fair price is retrieved for the contents. If the amount paid at auction is higher than the amount the tenant owes, the storage facility must write a check to the tenant for the difference. Facilities are only entitled to the amount that the past-due tenant owes.
Storage auction buyers attend auctions to bid on the units and attempt to win the contents. The majority of bidders at an auction intend on profiting from the resale of a unit’s contents, although some may simply be collectors or interested consumers.
A storage auction is the only way for a self storage facility to legally remove the contents of a unit in order to be able to rent it again. After multiple unsuccessful attempts to contact the owner of the contents, a storage facility begins the process of placing a lien on the unit. In accordance with state law, they send certified letters to the storage tenant and advertise the storage auction publicly (usually in the local newspapers). At any point in this process, a tenant can catch up on his or her payment, thus canceling the auction for that unit.
Anybody over 18 who attends an auction can purchase a storage unit, but the majority of buyers are professionals who have a defined strategy to resell the contents of the unit. These buyers often own storefronts like thrift or consignment shops, antique stores, or even their own auction houses. Since the popularity of storage auctions has increased.
If you’ve seen the popular reality TV shows, you know that bidders stay outside of the unit itself. Auctioneers allow people to look into the unit for a few minutes before they start the bidding. This helps expedite the auction and reduces the probability of somebody removing an item from the unit without it being auctioned.
Actually, some state’s lien laws (for instance, Alabama and Kansas) allow auctioneers to enter the units and parcel out the contents of the unit, selling items one by one. There are a few reasons this practice isn’t popular. First, it takes much more time to sell storage units in this fashion. Second, it increases liability for the storage operator and auctioneer, who are responsible for ensuring all items in the unit are sold publicly and nothing is removed from the unit without going through the public auction process. Third, reality television shows have promoted the popularity of selling entire units as a single lot. Today, auction-goers have come to expect the mystery factor of not knowing the exact contents of a unit.
There are three must-haves for storage auctions: a flashlight, gloves, and cash. Even if you don’t intend on buying a unit, without these items, you may as well have stayed at home. If you don’t have a flashlight, you’ll potentially miss valuable information when examining a unit. A small LED flashlight costs around $10 and can be carried in your pocket. Gloves and old clothes are important because some units have oils and grease, most have a thin layer of dust, and almost all of them have some object that could snag and tear what you’re wearing. Lastly, you have to bring cash. Even if you’re attending an auction for fun, you’ll kick yourself for not carrying cash if a particular unit looks like a great buy. If you do intend to buy, make sure you bring a padlock, as you’ll want to lock your unit for the remainder of the auction before you clean it out.
The most important thing to have to become a pro, other than relationships to sellers like antique and coin dealers, is a trailer. A trailer enables you to buy multiple units without worry about being fined or banned for leaving stuff behind. A hand truck (sometimes known as a dolly or handcart) and a furniture dolly are important for moving furniture buys.
As you attend auctions, you’ll learn some indicators that higher-value items may be hidden within boxes and behind visible items.
One trick is to look at the condition and type of boxes. Fresh, new boxes purchased with the intent of moving indicate a more affluent storage customer than do re-used appliance boxes.
Another trick is to watch the auctioneer and perhaps the facility manager. The auctioneer has a great gut sense as to the value of a unit, and may be noticeably more excited about a particular unit. The facility manager may have a good idea as to the original contents of the unit, so watch for clues in his or her body language.
Lastly, dust can be a big clue. Since the storage auction process can take months from the time an overlock is placed on the unit, there’s usually a visible layer of dust on the contents. If there’s an area with less dust than others, this indicates that something was removed from that area of the unit. This could mean that the tenant took their most prized possessions from the unit before the overlock was put on, or that somebody has illegally tampered with the contents after a lien was placed on a unit.
The short answer is to bid higher than any other buyer at the auction. The long answer is that there are some strategies and tactics that can increase your competitive edge.
When a storage unit goes into delinquent payment status, the facility manager will place a second lock on the unit to prevent the tenant from accessing its contents. This second lock is commonly referred to as an overlock.
At almost any auction, the most important rule is that you must clear out the entirity of the contents of the unit, generally within 24 hours. You must not use the garbage containers at the facility to dispose of any trash found in the unit. This means if you buy a unit with bulky junk, you’re going to need to take a trip to the dump or the junkyard. There are some other facility or auctioneer specific rules, such as policies that prohibit parking on facility, smoking, or bringing children.
In April 2011, a storage unit went to auction that contained Action Comics 1, an extremely rare and sought after comic book. It is significant in that it was the first appearance of Superman, among other superheroes. At $1,000,000 or more, it’s widely considered the world’s most valuable comic. This particular copy was valued at the one million dollar mark. Unfortunately, the comic book was a stolen item, originally belonging to Nicolas Cage. It is currently in the possession of the LAPD.