Self Storage Auctions
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There’s absolutely no telling just what might wind up being offered up for sale at auction. There really isn’t. A number of years ago I attended a government surplus auction wherein one lot being auctioned off consisted of over 500 lady’s braziers, of all things — the items came to be put up at auction due to a truck, which had been hauling the undergarments, being seized by some governmental agency. I didn’t win the bid on that one, but the person who did walked away with more than 500 women’s bras, having spent just a little more than 50 cents a piece for them! If they were his wife’s size, she’s never going to have to shop for bras again in her life.
A friend of mine tells me that he was once at a storage unit auction where one particular unit was opened to reveal nothing but a single, tattered and water-stained looking cardboard box sitting in the middle of the otherwise entirely empty unit. Nobody at the auction really wanted to bid on the unit, but the auctioneer repeatedly said, “C’mon! Somebody give me a lousy ten bucks for it. Anybody?” Nobody would. “Ok, how about five? Will anyone give me five dollars?” One of the attendees finally agreed to pay $5.00 for the unit. Upon inspecting his purchase, the winning bidder opened the box to discover that the box itself was entirely empty except for a plain, white envelope. He opened the envelope and inside was a note and a single one-dollar bill. The note read: “I already cleaned the locker out without anybody knowing, sucker! I hope you didn’t bid more than a dollar!” …not sure whether or not I should entirely believe my friend on that one.
At another storage unit auction that I once attended, while everyone was standing around waiting for the auction to begin, the auctioneer who was there to conduct the auction was telling stories about his many years in the business. He told of a time when conducting one auction many years ago. As the auction for one of the units began, the lock was cut, and the door opened in front of the attendees to reveal nothing in the unit except for five, entirely unclothed, female mannequins — all standing, shoulder to shoulder, in a perfectly straight line. They were exactly the type of mannequins used in clothing stores to display their garments, and each were obviously female mannequins. Except, there was something very odd about these particular mannequins, as, for each of them, someone had crudely crafted, out of what appeared to be paper-maché, reasonably life-like male genitalia, complete with simulated pubic hair, and glued the bizarre phalluses between the legs of each of the otherwise female looking figures. What’s more, written in red paint across each of their chests, each mannequin displayed a different girl’s name: “Daisy”, “Linda”, “Melissa”, “Ruth”, & “Cassandra.” …someone’s weird art project? Or, weird sex fetish?
Of course, along with these personal stories, there are well known stories of bizarre finds at such auctions as well. There’s a story about a cache of professional-grade, magnetic audio-tape reels containing more than 200 previously unreleased demo recordings by Michael Jackson — all made while the King of Pop had been between recording contracts, and thus entirely free from legal claim by any recording company.
After a fire occurred in her home, the famous R&B legend Aretha Franklin used the services of a storage facility to store a large amount of her clothing (including some notable outfits she wore during well-known performances) while her home received repairs. Mrs Franklin, however, for one reason or another, eventually stopped paying her storage fees and the unit was auctioned off to the highest bidder.
And, that’s a lot of the fun and excitement that comes from attending such auctions. There’s no telling what you might find. Yes, at the vast, vast majority of these auctions, while the deals available might be exciting, the particular items up for grabs aren’t really all that notable or out of the ordinary. But, every so often, there’s some awfully strange stuff that will surprise you. And, it occurs with enough commonality that if you talk to anyone who has been attending such auctions for just a little while, on anything approaching a regular basis, the chances are very good that they’ll most likely have a story that begins something like: “You think that’s weird? I was at an auction once where…”
If you have an interest in attending such auctions, and turning it into a profitable part-time, or full-time, business for yourself that can also be a whole lot fun, I highly recommend that you check out this amazing storage unit auction video course.
Self storage auctions are quickly increasing in popularity. The production of a number of recent reality style TV shows has greatly boosted people’s awareness of self storage auctions and the incredible opportunities that they often proffer. Along with this, the self storage business itself has seen an unprecedented boom in recent years. People seem to be acquiring more things — more things than they have space to store on their privately owned property. And, these people are turning to self storage options more than ever before. A couple of decades ago most fair sized cities and towns usually had a few self storage facilities — usually located on the outskirts of town. Today, these facilities seem to be practically everywhere.
Of course, with so many more people making use of these self storage facilities, there’s a lot more people who are also failing to pay their owed rental fees on their storage lockers — which means many more self storage auctions are taking place. And, of course, that means a lot more opportunities are presenting themselves to bidders and buyers looking to acquire desirable merchandise for pennies on the dollar at these self storage auctions.
With the widespread notoriety that self storage auctions have received due to the current crop of reality TV shows that are centered around the self storage auctions industry, however, and owing to so many people now being aware of self storage auctions, but not really having any experience with them, there’s a lot of myth and misinformation currently going around about these self storage auctions and how they work.
Hopefully this article will serve to dispel some of these myths. If you have questions regarding how self storage auctions actually work, read on. I’ve been attending self storage auctions since the 1990s, and I’m here to address some of the false information that I’ve recently seen being bandied about on the internet.
The Reality of Self Storage Auctions
I was recently wasting some time browsing around Youtube and I happened to be watching a few videos people had uploaded regarding self storage auctions. The comments sections on these videos was rife with comments from people who obviously had very little experience with actual self storage auctions. There was a lot of myth and misinformation being spread around.
A common question that I saw being posted over and over again in the comments section was something along the lines of “Can you really make money at self storage auctions like the people do on the show?” And, a common answer given was something along the lines of “No! Don’t believe what you see on TV. They fake it to increase ratings. When you go to a self storage auction, obviously, the storage facility looks through the storage unit first and takes out any valuable stuff before they put the unit up for auction!”
I couldn’t believe how common it was that people kept posting this fallacy — that storage facilities raid the storage lockers before the auction begins and take out valuables tin order to sell themselves. The fact is, this doesn’t happen. At the time of auction, when that door first opens and the self storage auctions begin, the auctioneers and the management of the storage facility know as much regarding what’s actually inside that storage unit as the people bidding do.
Oh sure, it may happen somewhere, sometime, at some fly-by-night, small-time, seedy self storage facility run by unscrupulous people. But, it’s so incredibly rare within the self storage industry that’s it’s practically non-existent. The reason being, of course, that such an action would actually constitute fraud. And, no respectable owner of a self-storage facility is going to risk their business by having fraud charges brought against them in order to gain perhaps just a few thousand dollars worth of profit here and there.
“But, why then,” I’ve seen people ask, “don’t these storage unit facilities just not hold self storage auctions, and just sell off the contents of the units themselves? I’ve seen those units on the TV shows regularly make huge profits for the successful bidders — surely the storage locker facilities could make more money if they just didn’t hold any self storage auctions and just went through the storage lockers themselves and sold off all the valuables?”
The answer, of course is, absolutely not. And, there’s a number of reasons for this. First, and perhaps foremost, is that the nature of reality TV does tend to skew the truth in this regard. The fact of the matter is, most storage lockers up for grabs at self storage auctions are either worthless, or end up containing just enough value that the successful bidder ends up just barely breaking even. On the reality TV shows, the bidders on those shows most likely bid on dozens of lockers that turn out to be completely worthless, or close to it. Of course, showing these storage locker wins wouldn’t make for very compelling television. So, those lockers are edited out of the show, and only the exciting ones end up being shown. For every “big win” you see on those self storage auctions TV shows, there’s probably a dozen entirely unexciting auction wins you don’t get to see.
Now, keep in mind that if a self storage unit facility were to forgo self storage auctions altogether and just root through every locker themselves and sell the valuables themselves, they’d incur an expense in doing so. They’d have to pay staff to sort through the units, research the value of the items found, and to actually sell the items. They’d also incur expenses associated with dumping the tons of worthless junk that a lot of people keep in their storage lockers. Because most lockers are mostly worthless, these expenses just aren’t worth it to the self storage unit facility.
The storage facility is in the storage business. They’re not in the flipping of used merchandise business. They’ve incurred a loss at the hands of someone who has failed to pay their rental fees and is tying up one of their lockers that could be rented out to someone who would be paying them a monthly fee. The storage facility merely wants to recoup as much as what is owed to them as possible and to get that locker cleared out to make way for the next customer. They don’t want to be dallying around having employees sifting through all of the junk looking for treasure, making arrangements to have the worthless junk disposed of, researching the valuation of the interesting items found and then going through all the rigmarole of trying to find buyers and moving the items. That’s not their business — that’s not what they’re set up to do.
So, they’re much happier letting someone else — a bidder at one of their self storage auctions — deal with of that stuff. It’s the individual self storage auction bidder that then has to worry about sorting through the junk, valuing items, disposing of the trash, finding buyers, etc., etc.,
Now, you might be saying something like: “Well, due to how much worthless junk there is compared to how many valuable items there are, if it’s so not worthwhile to the self storage locker facilities, wouldn’t it also be not worth it to me?”
The answer is, again, no. The last self storage auction I was at had ten lockers up for auction — ten individual self storage units. If the facility would have forgone a self storage auction and simply searched through the ten unites themselves, that’s ten units all containing some amount of worthless trash they’d need to sift through. Ten units of garbage they’d need to pay to dump. They’d have to pay employee wages to do it. It would be a big risk to them — they likely wouldn’t make enough money to cover the associated expenses they incurred.
But, if you spread that risk out across multiple bidders, the risk becomes much less and the acceptance of that risk becomes well worth it for the individual bidder. If you’re at a self storage auction and you successfully procure a locker with a bid of, say, $200.00. First of all, it’s just one locker — you can sort through it yourself. You don’t need to incur the expense of paying anyone. And, dumping the refuse is equally much less of a problem for just one locker. Now, maybe you’ve lost the gamble and the locker does turn out to be worthless — you’ve lost $200.00. It’s not the end of the world. You might make $600.00 in profit on your next locker. Or, maybe this $200.00 locker produces $5,000.00. The risk of the gamble is well worth it to the individual bidder buying lockers here and there. It’s not worth to the storage facility who forgoes self storage auctions. They’d be getting all of the valuables, yes. But, they’d also be getting all of the junk. When you put all of the lockers together, the amount of junk almost always makes the amount of valuables not worth your while. If you gamble here and there on individual lockers, and you do it wisely, there is risk involved, but the potential for reward makes it well worth it.
If you were the owner of the storage facility, however, and you chose not to hold a self storage auction and just go through all the stuff yourself looking for valuables, out of, say, 10 lockers you had up for grabs, you pay employees to sift through everything. The ten lockers might yield, say, a total of $20.000.00 worth of salable goods. But, you’ve paid employees hours worth of wages to sort through everything, you’ve incurred expenses for disposal of TONS of worthless junk, you’ve had to incur a bunch of time and expense research the interesting items you’ve found, you’ve had store the valuables until you were able to sell them… etc., etc., In doing things this way, every so often you might come out a little bit ahead and end up making more money than you would have if you held self storage auctions for the delinquent units. But, you’re much more likely not to even break even on each individual go round. So, over time, you’d actually make less money than you would had you sold the units by holding self storage auctions — you’d probably even lose money.
Much better to hold self storage auctions, not be bothered with the hassle, and focus on your main business of renting storage units to people. Leave the buy-low-sell-high flipping of pre-owned merchandise to people who are in that business.