It’s a common occurrence with television shows: they romanticize something like flipping a house or what goes on with a storage unit auction when the reality is far from perfect. If you’re a fan of shows like Storage Wars or Auction Hunters, then you may be thinking a self-storage auction could be a profitable way to earn extra cash. But before you go bidding, buying and selling items from a wild auction battle, you should know what you’re getting into.
Here’s the truth about storage unit auctions, including what they are, how they work and the most popular myths and misconceptions:
- What is a storage unit auction?
- Myth #1: You’ll always find valuable items.
- Myth #2: You can get rich quick.
- Myth #3: You can keep anything you find.
- Myth #4: Storage auctions are only for professionals.
- Myth #5: Storage companies get rich off of auctions.
What is a storage unit auction?
When a renter fails to pay their monthly storage fees for a specific period of time, the facility can put a lien on the property. A storage auction, also known as a lien sale, is when the tenant doesn’t respond or pay within the state-required notice period and the facility owner has the legal right to sell the contents of the unit.
Min Hwan Ahn, an attorney for the Law Offices of Ahn & Sinowitz, says the storage facility has a legal right to auction off the contents of the unit to cover unpaid rent after they’ve taken certain steps.
“They must follow specific lien enforcement procedures, including providing the original owner with proper notice and an opportunity to pay their outstanding debt,” he said. “A failure to comply with these procedures may result in legal disputes between the facility and original owner.”
From there, the storage facility sells the entire unit as-is. Even though the potential buyer is given the opportunity to do a visual inspection from the outside, the fun is in finding out whether you’ve bought a unit full of treasures or a unit full of junk!
Top 5 Most Popular Myths and Misconceptions With Self Storage Auctions
To help you sort through the misinformation surrounding self storage auctions, we’ve pulled together the five most popular myths and misconceptions.
Myth #1: You’ll always find valuable items.
Hate to break it to you but the highly dramatized action you see on shows like Storage Wars and Auction Hunters is just that: drama. As a bidder, you’ll only be able to view the contents from the front entrance. You’re not allowed to enter the unit or touch any of the items. You’ll never know exactly what’s inside until after you win, and more often than not, units contain ordinary household items and junk.
Pro tip: Most storage facilities offer you a limited amount of time (typically 24 to 72 hours) to clean out the unit so be prepared to immediately get to work if you win one.
Myth #2: You can get rich quick.
Finding valuable items in a storage unit auction is rare and requires in-depth knowledge and considerable effort. The professionals you see on popular shows are performing for scripted television, which means it’s mostly planned beforehand. And they have an abundance of time to make something look better than it probably is.
If you have the time and passion to make this a productive side gig, the money you can make in a storage unit auctions ultimately comes down to how likely you are to resell the items. Depending on what you find, the following sites may be useful in determining how valuable your items are on the resale market:
- Craigslist and Facebook Marketplace: furniture, household items, sporting goods, etc.
- Poshmark: name brand clothing, jewelry, purses, handbags, shoes
- Gazelle: electronic devices
- eBay: collectible items like baseball cards, toys, etc.
Myth #3: You can keep anything you find.
There are rules and legalities that must be followed when purchasing and removing items from a storage unit. In fact, Storage Treasures says, “any personal items such as family photographs, birth or marriage certificates, tax returns, medical or bank records, cremation ashes, etc. should be left at the storage facility.”
Ahn says if you don’t handle the personal items appropriately, it could land you in hot water.
“In some cases, mishandling these items may lead to legal issues related to privacy or identity theft,” he said. When in doubt, bring anything in question back to the storage facility so that you’ve made every attempt to return it to its rightful owner.
There are other items you shouldn’t keep also. Ahn says legal issues can arise when a buyer comes across stolen goods or handles restricted items that are illegal to possess or resell, like firearms, hazardous materials, or controlled substances. “Buyers must be aware of the legal requirements for handling and disposing of such items, and should immediately report them to the appropriate authorities,” he said.
Myth #4: Storage auctions are only for professionals.
While bidding on – and winning – a storage unit auction requires research, planning, knowledge and effort, anyone can participate. To bid, either in person or online, all that is required is that you are at least 18 years old and have a valid photo ID.
Move.org says you do not have to be a professional reseller but to expect seeing them in the mix. “While professional bidders show up to most storage unit auctions (think Storage Wars), amateurs are welcome, too. But they can be easy pickings for the established players. Sometimes the pros will purposefully jack up the bidding price to scare off the newcomers.”
Bottom line: Do your homework and come prepared.
Myth #5: Storage companies get rich off of auctions.
By law, storage facilities can keep only the overdue amount of rent, as well as enough to cover the costs of the auction, such as lock-cutting fees. The remainder goes to the tenant. Say a place has a delinquent tenant who owes $500, and a unit of the unit generates $1,000. The facility can keep just $500, plus enough money to cover auction fees. The rest is sent to the customer. For storage facility owners an auction is their last legal remedy to get back the storage unit to rent to someone else.
Think You Have What it Takes to Be the Next Storage Auction Professional?
Attendance at storage unit auctions has soared thanks to the popularity of television shows like Storage Wars and Auction Hunters. If you think it’s easy to become the next great storage auction professional, it’s probably not as simple as it looks. By knowing the myths perpetuated by the shows, you’ll go into it knowing not every storage unit is a gold mine waiting to be discovered, but rather a time-consuming gamble that you might occasionally get lucky on.