Personal Finance 

Storage Facility Auctions

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Storage auctions made the news a few weeks back in a New York Times article highlighting the growing number of storage auctions amid our housing crisis. A storage auction is similar to a foreclosure in that the leaseholder loses the rights to use the storage unit. What’s unlike a foreclosure is that the storage facility’s recourse is that they are permitted to sell the contents of the unit to the highest bidder. What’s been happening, according to NYT, is that there is a growing number of individuals unable to make lease payments on the units and thus find their belongings being auctioned off, oftentimes for only a few hundred dollars.

Enterprising bidders are hoping to score something big when they bid on these units because you can’t closely examine the contents of the storage unit. Most places will only let you take a cursory look from the outside and then the bidding commences. Since this is a pretty standard practice across the board, it seems like the storage facilities know that forcing bidders to bid sight unseen will yield them higher returns. This also tells me that unless you’re willing to work hard at selling off stuff, chances are you won’t be hitting a gold mine with 99% of auctions (though you always hear of miraculous finds at garage sales).

To find out more, rather than just read off the internet, I attended a storage auction being held locally. I called up the three storage facilities near my home and learned that the latest one was being held at the end of May, so I marked it on my calendar. The easiest way, if you don’t know where your local storage places are, is to look in your local newspaper because storage locations will usually publish auction dates there. They want as many people attending as possible, so they generally will give that information freely.

My Auction Experience

So at 2:00 PM on May 27th, I appeared at the Fort Knox Storage Facility located in Columbia, MD to revel in the sights and smell of American capitalism (I brought my camera but it was out of juice!). Joining me were five other capitalists, all of which were easily in their forties or fifties. Not many young capitalists are trying to find their fortune at a storage facility on a Tuesday afternoon – just means more fortune for me! I noticed that they all drove minivans or trucks, though one person drove their Jaguar to the affair, and carried locks and flashlights. I later learned that after the auction is over, the facility gives you a limited amount of time (it’s negotiable, it’s always negotiable) so sometimes you put your own lock on it to come back later.

Auction 1: The walk over to the first unit was pretty long, easily the length of the facility, and there was an air of eager anticipation in the air. The facility owner snipped the existing lock, lifted up the door and behold… an office chair, some old clothes, and the saddest looking subwoofer you’ve ever seen. Oh, and there was some trash in there too. The bidding was fierce but the winner walked away with the chair and the sub for $20.

Auction 2: This one actually held some good stuff but most of the attendees were turned off by the beat up pool table. There were four couches, some mattresses, a desk, that pool table, and who knows what else inside. The winner paid out $10 for the haul and it was uncontested, though everyone was immediately turned off by the prospect of dealing with the pool table.

In both instances, the facility operator was really obliging, letting everyone look inside and poke around. There aren’t really any “rules” to this auction thing, the facility just wants to be rid of it and the capitalists are looking to profit a little from getting the stuff in the first place. The operator offered the services of a moving company associate of his, to the winner of the pool table, but she said she’d just give it away online (probably through Craigslist) to anyone willing to haul it.

Parting Thoughts

Like tax lien auctions, this one has a significant personal element involved and I think my fortune can be made without tempting karma. I know the content owners have fallen behind on their leasing obligations, I know they are rightfully losing their property, but I think that there’s a measure of karma involved in buying someone else’s possessions on the cheap and trying to turn a profit from them.

What stops the facility from cherry picking the good stuff for themselves? They often know the contents beforehand because they can watch someone move in (the locks are not the facility locks, hence the cutting) but I suppose there’s a sense of trust involved.

Ultimately, I think this would make an entertaining hobby or help someone get some furniture on the cheap, but it’s likely not going to make you a fortune. Every once and a while you’ll hit a jackpot but it’s like the lottery, you play a lot and hope you get the big score… good for entertainment, bad for paying the bills.

{ 11 comments, please add your thoughts now! }

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11 Responses to “Storage Facility Auctions”

  1. This post kind of hits home for me. My soon-to-be mother in law is not the greatest with her finances. Well I might as well say that she is in her 50s and has no savings, has debt collectors calling her, and lives with her mom. I say that to tell you that she once had a storage unit. And once when I didn’t know her situation and was only “dating” her son we had put things in the shed. Me and J had no way of knowing that she was behind. We needed to get some things out because I had a funny feeling that this was the case. Well we went to the storage facility and told them that we wanted our stuff out and we were not the “owner”. They told us we had to pay the $300 late fees and dues just to open the unit and get our stuff out. We were still in high school so $300 was not happening. So needless to say we never EVER saw that stuff again. And I do not have a great relationship with his mom.

  2. EA says:

    I think there are laws about how they have to sell the stuff. I don’t think they’re allowed to “cherry pick”, they have to sell the contents as one lot. Because they don’t really benefit from the auction (I think any amount they make that is larger than the late fees owed goes back to the original renter) it’s supposed to keep them honest.

  3. Patrick says:

    My guess is that younger people are all at work at their day jobs, which is why there weren’t many people there.

    I’m not sure I would participate in these auctions. I love the thrill of the hunt and never knowing exactly what you are going to get,,, But it seems like a lot of work, and as you mentioned – preying on others’ misfortunes.

  4. Forest says:

    I used to be in the business of attending estate sales to find treasures to sell on eBay. Definitely felt like an outsider as a 20-something amongst the older crowd. But it was always fun and you never knew what you were going to find – I liked that aspect of it.

  5. 99k says:

    So, how did you find the auction you went to?

  6. jim says:

    They list them in the local paper.

  7. Bret says:

    I actually manage a self storage facility and have been in the storage business for over 2 years, so I have had many auctions. There are many legalities to having these auctions that do differ from state to state. The employees of the storage facility never have the right to access the space and remove things before the auction. That is considered stealing becuase the space is still leased to the customer and the belongings still belong to them until auctioned. I have never worked or talked to anyone who enjoyed having these auctions but they are necessary for the company to stay in business. We can’t just allow everyone to store their goods and never pay rent for their storage.

    I have never had an auction were we have made more than the customer owes from the space, but if it were to happen the customer does receive the left over amount. All we care about is receiving the rent that is owed to us. The auctions are actually bad for everybody and my company tries to avoid them. We never make what is owed to us and the customer loses their belongings.

    The purpose of running the ads in the newspaper are not to draw a crowd, but is mandatory by state law. In the state I work in, we send out first late notices, second late notices, pre-lien notices, lien notices that have to be sent certified mail, and run two ads in the newspaper.That is the state requirements, but like I said, they do vary from state to state.

  8. Jack says:

    RE: TO BRET’S COMMENT’S ~ Thank You!

    This is something I have thought about doing for 10+ years, And my biggest hesitation, has been the cherry picking.
    I live in Illinois and through a 3rd party I know of an owner that did go through his units, And would turn over thing such as gun’s to the police. Also I know in Illinois when their is a listing that the News Paper adds will list the contents to some degree – Saws,Tools,Table & Chairs, Misc. Boxes…
    By the description I can only assume they have been inside the unit before the auction.

  9. david says:

    I live on Long Island and I cant seem to find a website that will tell me when and where the next auction will be. Any Suggestions. Long Island New York

    • iva says:

      Hi David, if you search storage locations on the internet a United States map should show up, just click on the state where you live and all cities for that state will come up that has storage units. You can click on the towns close to you and call each one to find out when there next auction is. If they don’t have one scheduled a lot of times they will ask for your name and address and they’ll send you a notice a couple weeks before the auction. Iva

  10. steve says:

    Yeah if your get money from dippin balls in other peoples bin than so be it. Id do it

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