How to make money from public storage auctions near you (2023)

Have you ever seen the A&E series? "memory wars"? The reality show follows a group of people who make money by bidding on storage units that are up for auction. The contents of the unit go to the highest bidder, who then resells the items and takes home a tidy profit. Sounds like an easy wayearn on the side, To the right?

Unfortunately, as so often happens, television looks simple. Making money from stockroom auctions is hard work and if you're not careful you can lose a lot of money and get stuck with a lot of junk. However, it can be a fun and lucrative business if you do it right.

So how much can you make from it, and is it worth the risk? Let's take a look.

The rise of the storage unit in the US

Americans have a love of shopping and collecting and always need more space for all their belongings.

CorrespondingSpareFoot Storage Beat, a self-storage industry news and analysis website, as of March 2018, there were between 44,000 and 52,000 storage facilities in the US with a total leasable area of ​​2.3 billion square feet. That's an average of 7.06 square feet per person. SpareFoot also reports that spending on building self-storage has risen sharply since 2014, rising from around $1 billion to just under $4 billion a year.

With the advent of the storage unit, storage auctions have become a profitable business in their own right.Einfach Self Storagereports that 155,000 storage units are auctioned nationwide every year. With an average auction price of $425 per unit, storage unit auctions have become an industry that brings in $65 million per year.

This is how auctions for storage units work

Storage rooms are auctioned off if a tenant defaults on the monthly rent. This often happens when someone dies and their family is unaware of the unit, when someone has a medical emergency, or when someone is going through a divorce. If the outstanding balance is not paid by a certain date, the unit will be auctioned off to allow the owners to recoup some of their losses.

The period from insolvency to the auction varies from state to state. In most cases, once a tenant is in default for 30 days, the storage unit owner must send a piece of registered mail advising them that if they do not pay, the contents of the unit will be auctioned off. After a further 30 days, the auction date is set. The owner must then advertise the auction for at least two weeks, stating the address and device number and a general description of the content.

On the day of the auction, bidders are given a brief glimpse of the interior of the unit. You are not allowed to go in and look around; They must decide on a bid based on what they can see from the door and a guess what else might be inside. The unit can be full of junk or full of treasure; you never really know.

An auctioneer is on site to manage the bidding process. A storage unit could sell for $1 if there is only one bidder, or it could sell for thousands if there are many bidders and the unit looks valuable. The winner must also pay a cleaning deposit, which generally costs $100 to $200.

If you're the winner, you have 24 to 48 hours to empty the unit and make sure it's clean. If you meet the deadline, you will get your cleaning deposit back. You'll have to pay for the device, sales tax, and deposit in cash, so make sure you show up with several hundred dollars if you're the winning bidder.

It is also important to realize that once you win, you are responsible for itallin the unit. All of this “stuff” is yours now, and it must all be outsourced by the deadline.

What will you find in a storage unit?

A better question might be, "Whatchickensdo you find in a storage unit?”

There are many stories of auction bidders finding priceless treasure and shoeboxes full of cash in the units they have won. Others have found famous works of art,Antique and estate jewellery, shelves of designer clothes, cases of expensive wines and even celebrity memorabilia. But for every tale of hidden treasure, there are hundreds of tales of woe: junk cutlery, worthless documents, battered furniture, and broken bikes.

The secret to making money at storage room auctions lies in knowing how and where to resell everyday items that at first glance aren't worth much. Once you've gotten through a few auctions, it's possible to make a decent side income, or even a full-time income, from reselling these everyday items.

How to find auctions for storage units

Check your local newspaper first; Even the smallest storage facilities need to advertise every auction they hold over the next few weeks and you can usually find a comprehensive listing of the auctions here.

Keep in mind that storage facilities in smaller towns are likely to have fewer visitors, increasing your chance of winning a unit with a small bid.

There are also several websites to help you search:

• storage treasureslists local auctions and also conducts online auctions for storage units.
• AuctionZiplists auctions of storage units by zip code.
• Einfach Self StorageThe auctionlists their upcoming auctions nationwide.

Tips for bidding storage auctions

Still itching to try the storage auction? Follow these tips to increase your chances of success.

1. Learn the process first

One of the best ways to start bidding storage auctions is to go to multiple auctions not to bid, but to watch and learn. See what the process is like, what people are bidding on and what they are not bidding on. Pay attention to what other bidders bring to make the process easier.

Talk to the winners after the auction. What will they do with the contents of the unit? Do they feel like they overpaid for the unit or got a good deal? Talking to experienced bidders can shorten your learning curve and help you avoid some common mistakes.

2. Watch out for power games

Watching multiple no-money auctions can also help you learn about bidding strategies and recognize when someone is trying to take advantage of you.

Sometimes experienced bidders will increase the bid on a unit to drive up the price. They do this to discourage new bidders, as revenge for a past mistake, or to protect their reputation. Regardless of their motivation, someone who raises the bid can result in you significantly overpaying for a unit.

You can see a bid increase when someone places a bid that is not in line with the pace of the other bids. For example, bids for a unit started at $25 and bids have increased in increments of $10. The current bid is $95 when suddenly a new bidder steps in and bids $275. If the new bidder really wanted the items for themselves, they would have bid $105 or a little more. It does them no good to unnecessarily increase the price they end up paying if they win.

However, bidding much higher isn't always a power play; The bidder may attempt to secure the unit based on what they believe they can earn for it. For example, if a unit is currently listed for $300 and a bidder thinks it can make more than $1,000, they might bid $1,000 to scare everyone else off. If they stop bidding after their original bid, you know it was just a try.

3. Have a plan

Imagine winning a 10′ x 10′ storage unit crammed floor to ceiling with boxes, bags and furniture. You only have a day or two to get all that stuff out; That probably won't give you enough time to sort everything on site. You need to move it first and then start sorting.

All too often, new bidders get caught up in the bidding process and end up winning a unit before they've even thought about what to do with the content. If the unit is not cleaned by the deadline, the bidder forfeits their winnings to the storage facility. The only way out is to extend the monthly contract with the storage to buy some time.

It's important that you have a planbeforeYou take part in your first auction or you end up paying a lot more than planned. Questions to ask yourself include:

• Where are you going to put all this stuff until you sort it and resell it?
• Do you have enough space in the garage or basement to store it for a month or two? If not, do you have a dedicated storage room with enough space to sort items?
• Do you have a truck to transport everything? If no, how much would a rental or moving truck cost?
• Are you strong and healthy enough to move everything somewhere else? If not, how much will it cost to hire workers to move items for you?

4. Research where you can resell items

Chances are, you don't want to store all that stuff indefinitely, so you'll need to sort it, donate the junk, and resell the rest. This can take a long time, so have a list of places to sell or dispose of items.

This can include:

• Ebay
• Craigsliste
• flea markets
• Clothing consignment stores
• Consignment stores for children
• Mail order furniture stores
• Local auction houses
• antique shops

If you don't know much about vintage and antique collectibles, it's worth browsing antique stores to see what's for sale and how much it costs. This will help youIdentify valuable antiques and collectiblesif you find them in a storage unit.

You should also speak to representatives at your local auction house to find out how much commission they take. Most homes take a 10% to 25% commission on everything they sell. It's important to know this before bidding on your first unit so you can better calculate your potential profit. The same goes for local consignment shops, which can charge up to 50% commission.

You also need to know where to donate the items you don't want to sell. Remember you can get aTax deduction for donationsmany items, so it is important to determine which disposal option makes the most financial sense. A good start isGoodwill Valuation Guide, which lists the average selling price of the most donated items.

5. Be careful with almost empty units

Sometimes a storage unit is mostly empty, with just a few boxes or pieces of furniture. Be wary of these "empty" units as it could mean the renter has already walked in, taken the valuables and left the trash.

At your first auction, only bid on the smallest units with a decent amount of stuff in them. This gives you the ability to move, store, sort and resell items without getting too overwhelmed. As you gain more experience, you can work your way up to larger units.

Keep in mind that smaller units are often more attractive to bidders because they are easier to process and clean, so bids on these units can be higher even though they contain fewer items.

6. Bring the right tools

There are several items you should bring to an auction. With these tools you can better see what is actually inside the unit.

• A flashlight. You need this to see into dark units before you bid and after you win.
• A step stool. This can help you look beyond items in front of a unit to items further in before you bid.
• A notebook and a pen. A notebook is useful for jotting down large visible items before the bidding begins to calculate how much you can earn from them.
• A padlock. You should lock a unit with its own lock immediately after settling accounts with the camp.
• Gloves, bags and disinfectants. If you want to start sorting the items immediately after winning, make sure you have everything you need to do it. Bring garbage bags, empty plastic bins, a broom, plastic gloves, a face mask, and hand sanitizer. Remember that you must leave the device completely clean, so be prepared.

7. Only bid on what you can see

If you fantasize about what might be hiding in that towering stack of crates or behind that old fridge, you can overbid on a device and lose money.

A better strategy is to only bid on the items you can see. Estimate how much you can earn from selling these items and do not bid more than 50% of that amount. This strategy lowers your risk, leaves room for profit, and ensures you don't pay too much for a unit. And when you find a box full of rare books behind that old fridge, that's the icing on the cake.

8. Know the code

Storage bidders have a code of conduct that dictates what they can and cannot do. One thing that goes against a bidder's code of conduct is keeping highly personal items that you find in a unit.

Imagine the unit you win has a box with photos, old birth certificates, love letters and an urn full of ashes. These are items that you should return to the storage facility, which will then attempt to return these personal items to the previous renter's family.

Another no-go is using the on-site storage facility's dumpster to dispose of unwanted items. You are responsible for disposing of all items in a unit you win, and that means going to the city or county dumpster yourself. If you use the facility's dumpster, you'll upset the owners and risk getting banned from future auctions.

9. Sort carefully

When it's time to start the sorting process, wear plastic or rubber gloves, pants, and a face mask. Items are likely to be dirty and dusty, and you never know what a box will contain until you open it.

As you begin to go through the articles, be meticulous. Go through trouser pockets, leaf through book pages, open drawers and look for hidden nooks and crannies. Money or other small items might be tucked away in unlikely places and you'll miss them if you don't take the time.

Last word

Bidding storage auctions is not a get-rich-quick scheme or a quick route to easy money. It's dirty, labor intensive and risky.

Despite this, it can still be a great way to earn a solid side income, especially as you gain experience and develop relationships with warehouse owners, auction houses, and other people who can help you resell the items you find. It can also be really fun.

Have you ever bid on a storage room? If yes, how was your experience? Found junk or treasure? What tips do you have for prospective bidders?