Storage unit auctions have gained widespread attention
thanks to reality TV shows like "Storage Wars." These auctions
provide a unique opportunity for treasure hunters and bargain seekers to
potentially find valuable items hidden within abandoned or unpaid storage
units. However, there's more to storage unit auctions than meets the eye. In
this comprehensive guide, we'll delve into what you need to know about storage
unit auctions, including how they work, the legalities involved, and tips for
success.
1. How Do Storage Unit Auctions Work?
Storage unit auctions occur when the owner of a storage
facility sells the contents of a storage unit to recover unpaid rent or fees.
Here's a step-by-step overview of how these auctions typically work:
Non-Payment of Rent: When a storage unit tenant fails to
pay rent for a certain period (usually three months or more), the storage
facility owner can legally put the unit up for auction.
Auction Announcement: The storage facility owner must
notify the tenant of the impending auction, usually through written notices or
public announcements. These notifications provide the tenant with a last chance
to settle their debts and avoid losing their belongings.
Auction Preparation: The storage facility owner selects
the units to be auctioned and arranges a date, time, and location for the
auction. Some facilities hold regular auctions, while others do so only when
necessary.
Public Auction: Storage unit auctions are typically
public events open to anyone interested in bidding. Participants gather at the
storage facility, where an auctioneer conducts the proceedings.
Bidding Process: The auctioneer opens the unit, allowing
bidders a brief glimpse of its contents from the entrance. Bidders are not
allowed to enter or touch the items inside. The auctioneer then starts the
bidding, and participants can place bids until the highest bid wins.
Payment: If you win an auction, you must pay for the unit
immediately, usually in cash or by a specified method. Be prepared for this
financial commitment.
Clean-Out Period: After winning the auction, you
typically have a limited time (often 24-48 hours) to empty the unit completely.
You may not pick and choose items; you must remove everything.
2. Legal Considerations
Storage unit auctions involve legal obligations for both the
storage facility owner and the bidders. It's crucial to be aware of these legal
aspects:
Lien Laws: Storage facility owners must follow specific
lien laws when conducting auctions. These laws vary by state and may dictate
the notification period, auction process, and how proceeds are handled.
Tenant Rights: Tenants have rights in storage unit
auctions. They should receive proper notice of the auction, and if they settle
their debts before the auction date, they can reclaim their belongings.
Sold "As Is": Items purchased at storage unit
auctions are typically sold "as is," meaning there are no guarantees
or warranties regarding the condition or authenticity of the contents.
Legal Ownership: Once you win an auction and pay for the
unit, you legally own the contents, and the previous tenant has no claim to
them.
Reselling Items: While you have the right to resell the
items you purchase, be aware of any potential legal restrictions, such as the
sale of firearms, hazardous materials, or stolen property.
3. Tips for Success
Participating in storage unit auctions can be exciting and
potentially profitable, but it's not without risks. Here are some tips to help
you navigate the world of storage unit auctions successfully:
Research Local Laws: Familiarize yourself with the lien
laws and regulations governing storage unit auctions in your state.
Understanding the legal framework is essential.
Attend Auctions Regularly: To gain experience and
increase your chances of finding valuable units, attend auctions regularly.
You'll also become more adept at assessing unit contents quickly.
Set a Budget: Determine a budget for each auction and
stick to it. It's easy to get caught up in the excitement and overbid, so
discipline is crucial.
Bring Cash: Most auctions require cash payments. Ensure
you have enough cash on hand to cover potential winning bids.
Bring Tools: Having essential tools such as flashlights,
gloves, and padlocks can be handy when inspecting and cleaning out units.
Arrive Early: Arriving early allows you to review the
auction list and inspect units you're interested in before the bidding begins.
Assess from the Door: While you can't enter storage
units, you can assess their contents from the doorway. Use your judgment and
experience to make educated guesses about the potential value of items you can
see.
Research Valuable Items: Learn to recognize valuable
items that may be hidden within units, such as vintage furniture, collectibles,
or antiques. Knowing what to look for can be a game-changer.
Manage Expectations: Not every unit will contain hidden
treasures. Many will have common household items or even junk. Be prepared for
disappointment and consider it part of the game.
Don't Ignore the Small Stuff: Valuable items can be
hidden in boxes, under blankets, or within seemingly insignificant piles. Don't
overlook smaller items that could add up.
Consider Reselling: If you're not interested in keeping
the items you win, consider reselling them through online platforms like eBay,
Craigslist, or at flea markets.
Be Courteous: While competition can be fierce, remember
to be courteous and respectful to fellow bidders. Maintaining a good reputation
can benefit you in the long run.
4. Potential Risks and Challenges
While storage unit auctions offer exciting opportunities,
they also come with potential risks and challenges to consider:
Unknown Contents: You won't always know what's inside a
storage unit, and you may end up with items that are damaged, unsellable, or
unwanted.
Legal Issues: Be aware of the legal implications of
reselling certain items, especially those that may require specific permits or
licenses.
Storage Costs: After winning an auction, you'll be
responsible for storage unit rental fees until you empty the unit. This can add
up quickly if you're unable to quickly sell or dispose of the items.
Time and Effort: Cleaning out and reselling the contents
of storage units can be time-consuming and labor-intensive. It's essential to
weigh the potential rewards against the effort required.
Competition: Storage unit auctions have become
increasingly popular, leading to more competition and potentially driving up
prices.
Emotional Attachment: Occasionally, you may come across
items with sentimental value to the previous tenant. It's crucial to handle
such items with sensitivity and respect.
Conclusion
Storage unit auctions offer a unique and exciting
opportunity to find hidden treasures and potentially profitable items. However,
they also come with risks and responsibilities that should not be taken
lightly. By understanding the legal aspects, following best practices, and
managing your expectations, you can navigate the world of storage unit auctions
successfully. Whether you're a seasoned treasure hunter or a newcomer looking
for adventure, storage unit auctions can be a thrilling and potentially lucrative
pursuit. Just remember to do your research, set a budget, and be prepared for
the unexpected as you embark on your auction journey.
