The rise in popularity of shows like Storage Wars and Auction Hunters had led some people to believe that storage units are worth much more than they should be, and bids are going higher than ever before. This is bad news for fellow auction-goers, who must now struggle with extremely tight profit margins, but it may surprise you to know that it’s also bad news for many storage auction facilities across the country.
Who Keeps the Money from a Storage Unit Auction?
Storage facilities auction units in order to recover the cost of unpaid rent and avoid the time and expense of emptying units themselves. Some storage units don’t sell high enough to cover the full cost of unpaid rent, but the winners do empty the units out. As long as the units get sold, the storage facility is happy.
Occasionally, the storage unit will sell for more than the amount owed for rent. This might happen because it was filled with expensive items, or it could simply happen because the bidder overpaid for the unit. Either way, this causes the storage facility’s owner to see a profit on the unit. Unfortunately, he or she cannot always keep that money.
Instead, the money earned over the debt to the facility must be paid back to the unit’s original tenant. In most cases, it’s difficult to reach that tenant. If no contact can be made, the facility must hold onto the money for a period of time designated by the state, usually a year or two. After that point, different states have different requirements for what happens to the money. In a few states, like Texas, the facility owner is able to pocket the money after the waiting period. In other states, the money goes to the county, where it will sit in an escheatable account until it’s claimed by its rightful owner.
The only person who profits from a high-bidding storage auction is the auctioneer. Auctioneers are often paid on a commission based on a percentage of the auction’s total value. They may charge this fee on top of the auction or subtract it from the winning bid. Either way, high-bidding auctions benefit auctioneers, and auctioneers have definitely benefited from the publicity from the new reality TV shows.
For more information about storage auctions, please visit StorageAuctionForums.com.