Whether you’ve watched Storage Wars or Auction Hunters, you may be tempted to bid at auctions for storage units yourself. It could be a profitable side business, but there is some risk involved.
A storage auction takes place when a renter has not paid their storage fees for a certain period of time. The storage facility is selling the entire unit as is and the buyer can only perform a visual scan of the outside. In some cases, the buyer can snag a unit full of treasure at bargain prices. In others, they buy a unit of scrap. That’s the fun (and risk!) of storage auctions.
If you’re ready to take the plunge into the world of storage auctions and learn how they work, here are the steps to get started.
11 legitimate ways to make extra money
1. Find an auction
Warehouse auctions, also known as pledge sales, take place in self-storage facilities. If an apartment tenant fails to pay their monthly rent for a period of time, the storage facility may place a lien on the property. If the tenant does not respond or pay within the state-required notice period, the warehouse can legally sell the contents of the unit.
The length of time tenants must pay before their items are auctioned depends on state liens and storage policies. For example:
New Hampshire: In New Hampshire, renters are in arrears if they are 30 days or more in arrears. The warehouse must provide the renter with a notice of default and intention to sell the contents of the storage unit. The tenant has 14 days after receipt of the notice to pay the rent owed and reminder fees. If the tenant does not pay the required amount, the warehouse can legally auction the contents of the unit.
Florida: In Florida the time frame is shorter. The unit is already in arrears after five days of default. Storage facilities must notify the renter that the unit is for sale if they do not pay within 14 days. After 14 days, the facility must publish an advertisement in a newspaper once a week for two consecutive weeks. The auction can take place 15 days after the announcement in a newspaper.
Auctions are in person or online. To find auction listings near you, check the classifieds in your local or city newspaper, contact local storage facilities such as Extra Space Storage or Public Storage, or search online at the following websites:
2. Register for the auction
The auctions for self-storage units are public. Generally, to bid either in person or online, you must be at least 18 years of age and have a valid photo ID. Contact the storage facility or location to find out how to register before the auction. Most online auctions allow you to register through their websites by creating a profile.
3. Bid on one unit
Once you’ve found an auction you’re interested in, you can prepare to bid on a unit. Note that you cannot bid on individual items. You can only bid on the contents of the entire unit. Exactly how auctions work depends on whether they’re held in person or online, but in both cases the unit goes to the highest bidder.
When attending a live auction, dress comfortably and be prepared to spend several hours walking around the facility and inspecting the units. You are not allowed to enter the units, but you can visually inspect them from the outside. It’s a good idea to bring a flashlight to look at the units.
Bids come in quickly, so it’s a good idea to set yourself a budget and stick to it. Start small if you are just starting out until you gain experience reselling units.
You often have to pay cash at live auctions, so make sure you have receipts on hand and not just a credit card.
Online storage auctions are a little different. When bidding on an online auction, you should do your research beforehand by reading the unit descriptions and looking at any photos that are available.
If the photos show larger items, such as furniture or electronics, you can search for the brands of those items to find out what they typically sell for used items. Unfortunately, the listing can also be vague, only listing “bags,” which doesn’t give you much to go on.
Online auctions allow you to pay by credit or debit card, or you may need to make arrangements to pay cash in person. Some online auctions charge additional fees. For example, StorageTreasures.com charges a 15% fee (10% for Pro members). You may also be required to pay a refundable cleaning deposit.
4. Clean the device
You placed the highest bid for a unit and won, congratulations! Now comes the real work. After winning an auction, you have a limited amount of time to clean up the device and get rid of its contents. Typical time is 24 to 72 hours depending on storage facility so you may need assistance moving large or heavy items and a large SUV or truck.
When you start emptying the device, be sure to wear gloves and a mask to protect yourself from dust or debris. If you encounter hazardous materials such as cleaning chemicals, poisons, or flammable liquids, handle them with care and contact the proper authorities for disposal instructions.
You may need to return personal items such as photos or legal documents to the facility manager. You may also be asked to turn over firearms to law enforcement.
5. Sell your finds
If you are wondering how to make money from stock auctions, it all depends on your ability to resell your finds.
Once you’ve cleaned the unit, go through the items and see if any of them have value in the resale market. Depending on the items, you can use the following websites to sell your unit’s contents:
Gazelle: If you find used electronics, mobile phones or computers, you can resell them at Gazelle.
Craigslist: Craigslist is a good place to sell large items like furniture.
Facebook Marketplace: Like Craigslist, Facebook Marketplace can be a useful tool for selling furniture and electronics.
Poshmark: If the unit has clothing, shoes, jewelry, or handbags, you can sell those items on Poshmark.
eBay: For other items, like toys or collectibles, eBay can be a great way to reach buyers across the country.
If there are items in the unit that you are unsure of the exact value, consider consulting an expert. The value of some items, such as Items such as coins or baseball cards can range from a few cents to thousands of dollars, so getting an expert opinion can be invaluable.
frequently asked Questions
How do I find local storage auctions?
Local storage auctions can be found online at StorageTreasures and StorageAuctions. Or you can find local, face-to-face auctions by checking the classifieds in your area’s newspaper or visiting local stocking facilities’ websites.
What is the average profit margin at a storage auction?
The average profit margins at storage room auctions are difficult to calculate. For every unit that yields large profits, another could be a complete loss. Because of this, it makes sense to start small and bid low until you become more experienced and effective at finding a bargain.
What are the risks of bidding on storage auctions?
At a storage auction, you have little information before you place a bid. A promising looking unit may be worthless and there may be a cost to haul the junk away – on top of the money you bid – causing you to lose money.
For individuals who love the thrill of the hunt and are willing to take some risk, storage room auctions can be a great way to make extra money. Before you dive in, learn about the process and understand the risks. That way, you’re in a better position to spot a bargain and make some money. When you’re ready to get started, check out local auctions or bid online.
If you’re looking for other ways to make money, check out the best side hustles of 2022.
More from FinanceBuzz:
This article How to Make Money from Storage Auctions was originally posted on FinanceBuzz.