We’ve all seen the shows on TV where the storage unit door opens and dozens of buyers bid thousands of dollars on storage units full of what most of us would consider junk, only to unearth the rarest of antiques and collectibles from them. After watching those shows, you might just be ready to spend your life’s savings buying at storage auctions. After all, if the people on TV can make thousands, so can you, right?
Not so fast. Just like all reality TV, storage auction shows are an exaggeration of what happens in real life. They cut out all of the boring stuff and hard work, making it seem like you’ll go from moving a couple of moldy mattresses to unearthing gold jewelry and antiques in a matter of minutes. Sure, there are times when you can find “treasure” in abandoned storage units, but those times are few and far between. Here are some things you should keep in mind before you attend your first storage auction.
What To Know About Storage Auctions
10. You need to plan out your auction trips weeks ahead. Storage auctions are advertised in the legal notices sections of local papers, so you’ll have to sift through different classified ads to find what you’re looking for and make a game plan of what auctions you want to attend. Remember, auctions are usually scheduled on weekdays. If you’re serious about buying, you might need to use up some vacation days at work to attend. Also, keep in mind that many units are dropped from the auction because tenants pay up. I’d recommend calling the day before to see how many units the facility still has up for auction, so you know if it’s still worth attending.
9. Most auctions are cash only – and be prepared to pay sales tax where applicable. In Texas this means you’ll pay an 8.25% sales tax on top of your maximum bid and there is usually a refundable $25-50+ deposit (don’t worry you get the deposit back when you clear out the unit). Make sure you have enough cash on hand to cover these additional expenses.
8. You’ll need a way to move out all of the stuff from any unit that you buy. It’s best to keep this in mind before you buy a huge 10×30 storage unit and realize that you’ll never be able to clear it out with just your Honda Civic. If you don’t already have one, you may need to borrow or rent a truck or trailer to clear out any unit you purchase. Plan this ahead of time, because you don’t want to be left scrambling to find a way to move things on auction day.
7. You need a place to put all of the things that you buy. You’d be surprised how many people don’t think about this before they bid. If you’re the winner of that 10×30 unit that’s packed to the ceiling, you’ll need a lot of space in your garage to store that. If you’re serious about attending auctions on a regular basis, you might want to consider renting your own storage unit to use as a home base to store and sort through your purchases.
6. Remember, you need to take everything with you, even the trash. Keep this in mind when you’re bidding on these units. About a third of the contents of your average storage unit are items that have no value to the buyer and will go straight to the dump. You’ll have to figure in the costs of taking these items to the dump into your total bid price if you want to be able to make a profit.
5. Don’t bring your kids to the auction. I would even go one step further and say don’t let your kids anywhere near anything you’ve bought until you’ve searched it thoroughly. This is for their safety and well being. A lot of the things that I’ve seen in auctions were very “mature,” if you catch my meaning, and you don’t want your kids seeing that stuff (Hint: I’m not talking about AARP magazines). There could also be loose medication, weapons or other dangerous items that you don’t want your kids messing with, so keep them away from everything until you’ve sorted through it.
4. Buying other people’s stuff can be kind of depressing. Sure you can make money on these units, but be prepared to sort through someone else’s most personal possessions. There will be family pictures, personal documents, kid’s artwork from elementary school, and other personal keepsakes. Sometimes it’s tempting to try to reach out to these people to return the items, but I wouldn’t recommend it as it usually ends badly. Make sure you can distance yourself from the personal side of this business and, if you can’t, then maybe storage auctions aren’t for you after all.
3. Sometimes the value isn’t where you think it is. On TV, auction buyers unearth jewelry and antiques, but you will most likely end up with some very usable appliances and maybe some furniture that you can resell on Craigslist. These things won’t make you a millionaire, but they can still net you a profit of a few hundred dollars for your time.
2. Remember, your goal isn’t to “win” a unit; your goal is to make money. A lot of times, this can mean walking away from the auction empty handed because the bids got so high that making money would become impossible. Don’t get caught up in a bidding war in the heat of the moment just to win the unit. Plan out your maximum bid when the storage door opens and stick to that so you don’t overpay.
1. It’s a little like gambling – most of the time you’ll lose money, but sometimes you’ll win big. Some people get lucky and find riches in the first unit they ever buy, but your average bidder buys dozens of units before they find one with serious value. Those few times you hit it big on a storage unit and do find cash, collectibles or jewelry will keep you coming back for more.
Blog Source: Move It Self Storage| 10 Things To Know Before Going To A Storage Auction