One of my favourite shows on cable television was a show called “storage wars” in the US. This show featured people who made a professional living hunting down storage auctions. By self-storage auctions I mean, where the self-storage company is selling the items held within a self-storage unit. These items are household items that were surplus to people’s home but could also be business equipment, sporting goods, excess stock, etc. that couldn’t be stored in the lessee’s home or office property.
It’s all a gamble in the auction game.
The interesting thing is, as, on the show, the prospective buyers are shown an open door and cannot inspect the goods inside. It’s “pot luck” so to speak, quite exciting, like a gamble, you win some and lose some and many works in teams, going around bidding based on external
visual inspection of the storage unit.
The bidding process can take a number of forms, but the usual is process is where the auctioneer will walk around the storage facility, open the door, open the bids up to the prospective bidders and the bids are made on what the people think the value of the goods inside might be worth to them. The winning tenderer can then take possession of the goods in the storage unit and some cases people have found significant valuables. In others, I have seen, as in the TV programme storage wars, the people were bidding on a jetski, they couldn’t inspect it or get inside the storage unit for closer inspection. The funny thing happened, the successful bidders went into the unit, dragged out the jetski only to find it without a motor. You can imagine the looks on peoples faces as they had bid thinking there was a fully operational, working jet ski in the unit – that’s the risk you take bidding for left over contents in a storage unit auction.
Self-storage renters late in their storage fee payments may have possessions auctioned, for the bidders clamouring to these lock-up auctions, units may end up being filled with either trash or treasure.
There are usually bidding wars between regulars and professionals that attend these self-storage auctions, and bad decisions can make such sales a high-stakes pursuit for some.
There can be anything found in the storage units. Antiques, cash and jewellery right down to stained mattresses, drug paraphernalia and broken furniture.
There is no telling what is behind the door of a self-storage unit. It could be something valuable yielding a treasure trove, or it could be a dumping ground of worthless junk. It is the risk you take with self-storage auctions. It is a complete game of guesses for bidders.
Many of the buyers are seasoned professionals in the US for example that owns antique and secondhand stores. Many auctions are being held weekly that people make a living going from one sale to another.
In the US sometimes there could be 10 or 15 units at one sale at one location held to recoup unpaid rent. Sometimes renters pay their bills at last minute and in some cases storage unit tenants could pay their bills and reclaim their positions up until the moment when the buyers begin clearing out the rental storage units.
Storage facility owners get or give as much chance to their clients to pay their bills as possible. I am sure that the industry would not want to be tainted by being ruthless. Moreover, give the opportunity for rental tenants of self-storage units as much time to pay their bills as they can pay before taking action.
As with any auction bidding usually starts at a low price, under $100 but sometimes can often escalate fast into the low to mid hundreds of dollars. If there’s something that looks exciting such as a jet ski inside this can go and thousands of dollars in bidding. How do you know how good the jet ski is though by externally viewing inside the unit from the door? You cannot. Sometimes people take a gamble when they see a quantity of items such as boxes and plastic bags but cannot see inside these bags and boxes, only look from outside during preauction walk around. Pre-Inspection does not allow you to see through.
Like any auction, it is easy to pay too much and get caught up in the hype of the auctioneer and crowd around you.
In the US there are requirements that by law or personal photos and documents, and birth certificates, taxes, bank records must be returned to the renter.
Some tenants have learned to make money from deceiving buyers of these units.
In the US any funds from the auction sale are used to pay out the outstanding rent and “overage” of money left returned to the tenant. So for example, if a unit is sold at auction for a thousand dollars by a tenant who owes say $600 to the storage facility, from the bid of $1,000, after paying out the rent owed, the other $400 will go to the renter regardless of the value of the contents.
Therefore if the unit contained items which have little value, renters themselves can make money if the bidding is high. Conversely, if the unit has high-value goods that were seized to recoup unpaid rent, then the ex-tenant will lose out. As a result, some scams have developed in the US where con artists will rent a unit, fill it with what appears to be valuable items aka sealed up TV boxes, PlayStation boxes, jewelry boxes and stop paying rent on the storage unit.
These boxes what appear expensive items could be just empty boxes and when the winning bidder opens the boxes and finds them empty the storage unit facility gets back its rent and the rest of the money goes to the renter, well aware this was a scam.
Technically the renter has not broken any laws is not illegal to store empty boxes but is clearly misleading for would-be buyers who may pay thousands thinking they are buying genuine products inside the boxes. As they say, if it looks too good to be true it probably is.
Also, in the US storage auction scene, construction workers who have faced large dump charges have been known to rent a unit fill it with building waste then default on the rent passing on the storage facilities job to clean out and haul everything to the rubbish tip – and pay those costs.
As you can see from some of the above examples sometimes, defaults are on purpose. People do not pay their bills because they have cleaned out everything they want.
Numerous rules govern in the US storage unit auctions and dictate what the buyers have to give back or can keep, for example, any cash the lucky buyers can keep. Storage unit owners or their family members and employees cannot bid at these auctions.
Australian storage auction scene.
This post will be continuously updated but for now, I have decided to start a thread and list out the companies that are doing content auctions or content lots of overdue rental storage unit auctions.
These auctions are worth looking at and monitoring. If you happen to be a company that specialises in these type of sales or know of any companies doing these auctions that I haven’t listed below then, please contact me via the contact us page.
At the time of writing, I have kicked off the listings with Grays online. I hope to get this article finished with quite a list of companies that you can keep an eye on for storage unit auctions.
Grays Online conduct self-storage auctions. Image source – graysonline.com.au
US storage unit bidder buys 40 frozen cats.
If you thought that it was pot-luck bidding for the contents of a storage unit auction, take this case of a New York man who bid on a storage unit an auction and was surprised to find 40 dead cats frozen in the Queens lockup that he had successfully won.
The storage unit previously was rented to a lady that had recently pay stop paying rent, therefore resulting in the unit being seized to recoup unpaid rent. It is unclear what happened and whether she was charged with animal cruelty after the reported investigation.